While old-age security has permanently increased by 10 per cent for seniors aged 75 and older, employees can maximize this benefit, along with their Canada Pension Plan benefit, by delaying retirement as long as possible, says Bonnie-Jeanne MacDonald, director of financial security research for the National Institute on Ageing at Toronto Metropolitan University.
“People need to step away from that mentality of what [is immediately needed] and getting by year by year. Retirement is such a different situation because you’re planning for a future you, who is also a more vulnerable you.”
The OAS increase recognizes Canadian seniors are in a very different situation than any previous generation in history, she says, noting people are living longer and many will have less support from their families. “We have the first generation in history to have very few children, they don’t have these deluxe defined benefit pension plans and they’re facing longer periods of retirement because they’re living longer. This increase recognizes that older Canadians just don’t have the same support systems as they had in the past.”
A recent Statistics Canada report showed a record number of Canadians are nearing retirement. For these employees, MacDonald stresses the importance of thinking about retirement long term. “If [they] want to help themselves, their families and our society in general, they need to take a long-term perspective because retirement is no longer just about the next five or 10 years, it could be up to the next 40 years.”