Sean and Lori O'Neill at their home in Orillia, Ont., on March 3.Shay Conroy/The Globe and Mail
Sean O’Neill was about eight months into retirement when he saw a local resort owner on TV complaining about the challenges of finding staff.
“I felt sorry for the guy and saw that his resort is just up the road from where my wife and I live,” says Mr. O’Neill, 61, of Ramara, Ont., about 130 kilometres north of Toronto.
The former engineer was already considering getting a part-time job, so he visited the business, Fern Resort, to find out what was available.
The resort needed someone who could drive a tractor, flood the ice rinks and do general maintenance – all tasks Mr. O’Neill had done growing up in northern Ontario. He was hired almost immediately and has worked there since early 2023, for about eight-to-10 hours a week.
The gig doesn’t pay Mr. O’Neill nearly as much as his former full-time career, but for him that’s not the point.
“It’s beer money and a chance to get out and meet people,” Mr. O’Neill says, adding that his wife Lori O’Neill, 58, also decided to get a part-time job in retirement at the LCBO.
“I think she was getting jealous, hearing about the different things I was doing and meeting new people,” he says with a laugh.
The O’Neills are among thousands of Canadians who take on part-time work in retirement. A 2024 Statistics Canada report says 21 per cent of Canadian-born and immigrant seniors aged 65 to 74 were employed in 2022; 9 per cent were by necessity and 12 per cent by choice.
Rona Birenbaum, a certified financial planner and founder of Toronto-based Caring for Clients, often sees retirees take part-time jobs to earn money and stay active.
“I think the social interaction is what some [retired] people miss the most, which can be worth as much or more than the financial benefits,” she says.
Still, Ms. Birenbaum says retirees who take on part-time work in retirement need to understand tax implications when combined with other income sources such as pensions, non-registered investments and withdrawals from a registered retirement savings plan (RRSP) or registered retirement income fund (RRIF). She notes that employment income is taxed at an individual’s marginal tax rate.
Retirees should also factor in their Canada Pension Plan (CPP) and Old Age Security (OAS) benefits and, if they qualify, the Guaranteed Income Supplement (GIS). Ms. Birenbaum says part-time income could result in a clawback or loss of GIS or OAS benefits. Part-time work in retirement could also allow Canadians to delay taking their CPP and OAS, which she notes increases the value of the inflation-indexed pension benefits.
Ms. Birenbaum says part-time work in retirement may offer other benefits, such as medical or dental coverage or free or discounted goods and services.
Mr. O’Neill’s perks at Fern Resort include free use of the facilities, including pickleball courts, pools and the boat launch, which he says aren’t taxable benefits.
“So I guess I can say I do this part-time thing for fun, a small revenue stream and for the fringe benefits,” he says.
Since taking the job, Mr. O’Neill has owed the Canada Revenue Agency money upon filing his tax return, after factoring in his other retirement income. He could ask his employer to withhold tax, but prefers to set aside money and pay the amount when it’s due.
Jamie Golombek, managing director, tax and estate planning at CIBC Private Wealth in Toronto, says people working part-time in retirement will always be better off financially than if they weren’t working, including those in top tax brackets.
“If you earn $100 and keep $47, you’re $47 richer. You’ll always have more money,” Mr. Golombek says, using Ontario’s top tax rate of about 53 per cent as an example. “The question is if it’s worthwhile.”
He adds that part-time workers can continue claiming the Canada Employment Amount of up to $1,433 if they have at least that much employment income (not including the self-employed). With a 15-per-cent, non-refundable credit, the tax savings can be up to $215.
Mr. Golombek says people with part-time jobs can also continue making CPP contributions until they reach 70, which will help boost their benefit payments later in life.
“I would argue, in almost every case, it’s worth working part-time in retirement as long as the job isn’t too physically taxing for your age and stage,” Mr. Golombek says.
Editor’s note: A previous version of this article stated that employment income is taxed at an individual’s highest marginal tax rate. The word "highest" has been removed to clarify that employment income is taxed at an individual’s marginal tax rate, which depends on their income.
