What it really means to tie life expectancy to retirement age

When a country ties retirement age to life expectancy, it’s no longer picking a fixed number like 65 or 67. Instead, it's saying: “As you live longer, you’ll work longer.” That’s what Denmark has done—and if Canada follows suit, the entire retirement landscape will shift.

Here’s how it would affect you:

Retirement age stops being fixed—it becomes a moving target

If life expectancy rises by two years, so does the retirement age. That means today's 40-year-old might not be eligible for full government pension benefits until 68, 69, or even 70. You can’t count on the age your parents retired at. You may work five years longer just because people in general are living longer—even if you personally aren’t feeling five years stronger.

Your pension benefits will get delayed or reduced

Old Age Security (OAS) and the Canada Pension Plan (CPP) could be paid out later. Worse, if you decide to retire early, your reduced benefits will be even more reduced than they are now. A higher retirement age means steeper penalties for tapping your pension early. The system is telling you to stay in the workforce longer—whether or not your body and mind can handle it.

It hits hardest if you’re in a physically demanding job or low-income role

White-collar professionals may adjust. They can scale back, consult, or work remotely. But tradespeople, service workers, and caregivers don’t always have that luxury. If you’re a construction worker at 65 and the retirement age jumps to 70, what’s your realistic option? Push through physical pain, or retire into poverty? This shift punishes those who can’t afford to wait.

The system shifts risk from the government to you

By linking retirement age to life expectancy, governments offload the financial pressure of longer lifespans onto individuals. Instead of increasing pension funding, they simply delay when you can access it. It sounds like smart policy—but only if you’re not the one stuck working longer with fewer safety nets.

It makes personal planning non-negotiable

If Canada ties retirement to life expectancy, passive savers will fall behind. You’ll need to actively build financial independence to insulate yourself from policy shifts. That means treating your own retirement savings as a private pension—not a backup. The more you save, the less control the government has over when you have to retire.

Bottom line: tying retirement to life expectancy changes the social contract. Don’t wait to see if Canada follows Denmark. Act like it already has—and make sure you’re not caught unprepared.