When Can I Retire?

Choosing a retirement date can involve many important decisions and options. We're here to help you understand those options.

"Normal retirement age" in the Plan is 65 years old, but you can retire as early as your 55th birthday or as late as the end of the year in which you turn 71. Your retirement date can have an effect on the amount of pension you receive, as outlined on this page.

How Early Can I Retire?

The earliest a vested PSPP member can begin their pension is age 55. Retiring earlier than the normal retirement age of 65 means you will receive a reduced monthly pension—unless you have enough pensionable service to meet the 85 factor (described below).

You may have the option of starting your pension earlier than age 55 if you become disabled and stop contributing to PSPP.

85 Factor (85 Points)

The 85 factor is calculated by adding together your age and years of pensionable service at retirement. If the total equals at least 85 points, you're entitled to an unreduced PSPP pension as early as your 55th birthday.

What is a Reduced Pension?

If you retire early—before age 65 or before reaching your 85 factor—your monthly pension amount will be reduced.

The early retirement reduction amount is 3% per year multiplied by the lower number of:

  • the number of years it would take you to reach age 65, or
  • the number of years until you reach 85 points.

Here is an example of how early retirement reduction is calculated:

Step 1

Calculate the number of years it will take for the member to reach age 65 and the number of years until they reach 85 points.

Step 2

Use the lower number (7 years) to calculate the total pension reduction rate.

Step 3

Determine the member's monthly pension with the reduction applied.

In this example, if the member waited to start their pension until age 65 (the normal retirement age in the Plan) or reaching 85 points, their unreduced pension would be $1,000 per month ($12,000 annually).

Based on the pension reduction calculated in STEP 2, the member's pension will be subject to an early retirement reduction of 21%, which results in their pension being $790 per month ($9,480 annually).

How Late Can I Start My Pension?

You must start your PSPP pension no later than December 31 of the year in which you turn 71. In this situation, you don't have to stop working for your PSPP employer, but once you start receiving a pension from PSPP, you no longer contribute to the Plan.

When Should I Retire?

The date you choose to begin your pension is up to you and can depend on a lot of factors, such as the health of you and your pension partner, your financial situation, the standard of living you want in retirement, and how long you want to continue working.

The amount of your monthly pension will be different depending on the date you choose to start your pension. Your selected date will determine your age at retirement and may impact your highest average salary and how much service you’ve accumulated in the Plan at retirement. These are key components that are used in the calculation of your pension. Your final monthly pension also depends on the pension option you choose and if you choose to coordinate your pension.

Use the Pension Estimator or the Pension Projection Calculator on mypensionplan.ca to estimate how different scenarios, such as early, normal or late retirement, affects your monthly pension.

To find out more about retiring, read Retirement Planning.