Retirement Age Raised : Retiring at 67 may no longer be the default option. Governments around the globe are moving toward raising the threshold for pension eligibility, reflecting longer life spans, changing work dynamics, and the need for sustainable public support systems. With a new pension age coming into focus, here’s a detailed look at how this change might affect you and what steps you can take to stay ahead.
Pension Rules in Australia: Retirement Age Moving Past 67
In Australia, the push to raise the age for the public pension means the familiar “retire at 67” model is changing. Understanding the full implications will help you adjust your plan accordingly.
Impacts for Australians
- Later Eligibility Date: The Age Pension could start at 69 or 70 instead of 67; this requires more savings or longer work.
- Superannuation Planning: Your super drawdown and asset sequencing may need to cover a longer pre-pension period.
- Work and Income Tests: Working part-time longer could improve financial security, but you must account for the pension income/assets tests.
Steps to Take
- Build scenarios for retirement at ages 65, 67, 69, and 70+.
- Consider reducing work hours instead of stopping completely to streamline income flow.
- Match your insurance and emergency fund to a potential delayed pension start.
Knowing that “67” may no longer be the norm makes your strategy more resilient and your timeline clearer.
Canada’s Pension Rule Shift: Raising the Age Beyond 67?
Canada’s retirement framework, involving both the Old Age Security (OAS) and the CPP/QPP programs, is under review. A shift to a new pension age in Canada could affect your planning timeline significantly.
What Could Change
- OAS Starting Age: If the age increases beyond 67, you may receive full OAS later than planned.
- CPP/QPP Options: Although they allow early or delayed claiming, the reference age shift could alter your decision matrix.
- Bridge Funding: A delayed start increases the importance of interim resources—savings, part-time work, or rental income.
Planning Tips
- Model combinations—CPP at 60/65/70, OAS at 67/69/70—to see lifetime benefit risk and reward.
- Use tax-sheltered accounts wisely and confirm how withdrawals align with your pension start.
- Coordinate retirement timing between partners for optimal survivor benefit protection.
Understanding the potential for a higher pension age helps you stay in control of your retirement journey.
United States: Preparing for a Higher Full Retirement Age
The U.S. already phases the Full Retirement Age (FRA) upward depending on birth year. A further increase could redefine the term “retire at 67.” With a higher new pension age in the United States, your timing and strategy become even more critical.
Important Considerations
- Claiming Early vs. Delayed: If FRA rises, the penalty for early claiming can deepen, and the reward for delay can grow.
- Healthcare Readiness: Retiring before Medicare eligibility means you must plan for alternative coverage and costs.
- Tax Strategy: Delaying benefits can keep your taxable income lower in those years, which may optimize IRAs/401(k)s and Roth conversions.
What You Should Do
- Compare benefit outcomes at 62, FRA, 70—and note how your spouse’s claim timing intersects.
- Keep a cash reserve for the months between stopping work and claiming benefits.
- Make sure retirement plan assumptions reflect the possibility of delaying benefits to age 70 or beyond.
“Big change” may sound alarming, but with clarity and a structured plan, you can turn it into an opportunity.
Universal Steps for Anyone Facing a New Pension Age
- Scenario planning: Estimate retirement at different ages—65, 67, 69, 70+—and compare outcomes.
- Bridge strategy: Shimmy between work, part-time income, or savings to cover any delay before public benefits.
- Diversify income streams: Don’t rely solely on government pension—include employer retirement plans, investments, rental income.
- Withdrawal sequencing: Use tax-smart rules for savings, deferral, and benefit start timing.
- Healthcare alignment: Ensure your plan matches any change in benefit eligibility with your insurance coverage.
Key Takeaways
- The age “67” is increasingly a baseline—not a guarantee.
- Flexibility is your strongest strategy: detailed modeling, contingency funds, and proactive adjustments.
- Policy changes differ by region and can happen with notice—stay informed and adapt early.
Note: This content offers general information only and is not a substitute for personalized advice. Pension rules vary by country, region and individual situation. Always verify with official sources or licensed advisers.
