Thomas Klassen is a professor in the School of Public Policy and Administration at York University.

Canadians who reach the age of 65 will live longer than ever – another 21 years, of which 15 are in good health. They are also retiring later than ever. The average retirement age is 65.4, while a generation ago it was 61, according to data from Statistics Canada.

Government policy has provided Canadians with some incentive to stay in the workforce for longer by lessening the link between retirement and pension eligibility. Retirement benefits from the Canada Pension Plan can be delayed from 60 to any age up to 70, with higher benefits for each year that it’s delayed. The Old Age Security benefit can be pushed from 65 to any age up to 70. If not paid until age 70, recipients will receive one-third more in benefits than at 65.

Canadians at 60 can receive CPP and remain employed. At 65, they can simultaneously receive CPP and OAS benefits while continuing to earn employment income, or they can choose not the receive one or both of the benefits. They can also contribute to an employer pension and to registered retirement savings plans until they reach 71.

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Yet, there are still barriers to the labour market participation of older workers. Many provinces allow employers to impose a mandatory retirement age of 65 if the workplace has a pension plan. Labour and human rights legislation permit employers to exclude workers 65 and over from health care, disability and life insurance benefits. The regulations that govern workers’ compensation schemes continue to assume that employees retire at 65.

At present, workers can no longer contribute to their employer pension or RRSP once they reach 71, but must then begin to receive pension payments and withdraw funds from their registered retirement income funds. The Canadian Association of Retired Persons and various pension industry groups have long called for the elimination of mandatory withdrawals from RRIFs at any age, or the option to delay those withdrawals until 75. Doing so would provide older people, whether employed or retired, with greater control of their retirement savings.

In adjusting and modernizing employment regulations governing older workers, policy-makers must allow individuals to make their own choices, rather than dictating solutions.

The Harper government’s ill-fated policy to raise the eligibility age of the OAS to 67 is a textbook example of what not to do. Limiting access to a benefit, especially one aimed at retired people with fixed income, was both poor politics and policy. The Trudeau government promptly reversed the age increase once it assumed office. A wiser policy has been to keep the age of eligibility at 65, but provide the option – and incentives – for individuals to delay receiving benefits.

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A major reason that Canadians are now working longer is that two decades ago, governments across the country eliminated mandatory retirement at 65 for most employees. This reform did not compel employees to work longer, but rather provided flexibility to do so if they wished. At that time, some observers predicted that if workers no longer must retire, fewer jobs would be available for young people. This has not occurred.

The youth unemployment rate has been slightly lower during times when average retirement ages increased, and higher when retirement ages decreased. In other words, the increase in retirement age over the past decades has not been detrimental to younger workers.

Politicians should consider policy reforms that are targeted to specific groups of workers, since retirement age varies by sector. On average, self-employed workers retire at 68.4, those in the private sector retire at 66, and public-sector workers at 62.6. Public sector employees will be most impacted by reforms to defined benefit pension plans meant to provide options and incentives for later retirement. Those changes would be less consequential for those in the private sector, or self-employed workers who typically do not have such plans.

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Women live longer than men and are at greater risk of facing poverty in old age because of lower lifetime earnings from employment – often stemming from leaving the labour force because of caregiving duties. Women, in particular, may benefit from reforms to how the CPP calculates time away from work because of young children. Reforms to OAS, with the aim of encouraging older people to earn employment income, can also be considered.

The age of 65 is no longer the marker between work and retirement. The boundary between receiving employment income and pension income is more porous today than in the past. By working longer than the past generation, Canadians are calling into question some of the assumptions about both work and retirement, while supporting the country’s economic growth.

Governments can do more to ensure that older Canadians have options for their retirement or employment, or some combination of both. Additional incentives for those interested and able to work longer are positive steps for individual Canadians and the economy.