Leading Edge / Winter 2001
Freedom 60?

Seniors benefit from public programs when retiring between the ages 60 and 61


U of T economists have found that early retirement can be financially advantageous for Canadians. A recent study by economics professor Michael Baker, graduate student Kevin Milligan and MIT economics professor Jonathan Gruber shows that seniors benefit the most from public retirement programs when they stop working between the ages of 60 and 61 (the youngest age at which individuals can collect their public pension). The researchers examined the earning histories of thousands of seniors, calculated their entitlements under the various retirement programs (the Canada or Quebec pension plan, Old Age Security, Guaranteed Income Supplement and the Spouse’s Allowance) and compared these figures to the seniors’ actual retirement decisions. “The total lifetime benefits the average Canadian receives from government retirement programs are greatest if he or she retires at age 60. There is an incentive in the system to retire at that age and Canadians seems to be responding to it,” says Baker.


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