Portrait of a middle-aged man <\/p>\n
John, 61, was nearly set for retirement: he had a good job, a solid nest egg and would benefit from the extra income afforded by taking the Canada Pension Plan (CPP).<\/p>\n
Then life zigged. His company laid him off \u2014 much to his relief, since he planned to give notice anyway \u2014 and his severance will cover him until the month his CPP benefits would have started.<\/p>\n
There\u2019s a catch: he\u2019s not yet 65, so he\u2019d need to bridge certain expenses on his own until he can also collect Old Age Security (OAS) and fully tap into senior benefits.<\/p>\n
Additionally, his former employer has offered him a team-leading, client-facing role in a department he\u2019s always wanted to join. The pay and benefits are strong. He\u2019s tempted \u2014 but he can\u2019t see himself working past late 2025.<\/p>\n
He wonders if it\u2019s fair to take a leadership job he intends to leave within a year.<\/p>\n
Let\u2019s say John is married. His 60-year-old spouse has been covered under his employer\u2019s benefits plan and is still a few years away from full OAS and CPP eligibility.<\/p>\n
The couple has roughly $1 million saved \u2014 about $940,000 in RRSPs\/TFSAs and $60,000 in cash \u2014 with a mortgage nearly paid-off. Canadians estimate they\u2019ll need about $1.7 million to retire<\/a> comfortably in 2025, so John may be within striking distance even without maximizing CPP \u2014 but not quite at the \u201cmagic number.\u201d<\/p>\n Many older Canadians say work offers more than just a paycheque. A national survey from Statistics Canada found that older workers like their job or stay engaged. \u2014 and enjoy the extra income.<\/p>\n Yes, potentially in three ways:<\/p>\n If John starts CPP at 62, the money he will receive from this benefit is permanently reduced (up to 7.2% per year before age 65). Delaying beyond 65 increases benefits by 0.7% per month (8.4% per year) up to age 70.<\/p>\n If he already applied, he generally has up to 12 months after his first payment<\/a> to cancel his application, repay benefits received and restart later at a higher amount.<\/p>\n And if he works while receiving CPP before age 70, he may still have to contribute \u2014 which could increase his future pension through the Post-Retirement Benefit (PRB).<\/p>\n Story Continues <\/p>\n Continuing to work can keep John on an employer-sponsored benefits plan, potentially avoiding the cost for prescription drugs, dental care, or vision expenses before full provincial and federal senior benefits kick in.<\/p>\n Read more: Here\u2019s how to retire in 10 short years<\/a> no matter where you live in Canada \u2014 even if you\u2019re starting with $0 savings<\/p>\n Working for even 12\u201324 months allows him to top up RRSPs and TFSAs, and to take advantage of higher contribution room from earned income.<\/p>\n There\u2019s also a non-financial upside: older adults who keep working often report better mental health, purpose and life satisfaction than those who leave the workforce abruptly. If the new role is genuinely interesting, John may enjoy the extra time.<\/p>\n Taking a client-facing, team-lead job and exiting in under a year can create transition challenges \u2014 and possibly bruise his reputation with that employer.<\/p>\n If he loves the work, values the benefits, can delay CPP and is willing to give the role a solid two-year run, then he should take the job.<\/p>\n A practical compromise is to commit to 18\u201324 months, be transparent about a limited horizon, and use the time to maximize savings and benefits.<\/p>\n John is also in a good position to retire now and cover pre-OAS expenses without straining his finances.<\/p>\n Either way, he\u2019s set up well. But if the job is truly the dream, the financial and lifestyle advantages suggest he should enjoy one last lap in the workforce \u2014 and retire on his terms.<\/p>\n