OAS Clawback: How Much Does It Cost Canadians?

In this video, we'll go through how much OAS clawback costs Canadians, how to mitigate it, and some potential changes that could be implemented to OAS in the future.

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TIMESTAMPS
0:00 - Intro
0:12 - 2024 Income Threshold
0:55 - How Many Are Affected?
1:27 - Is OAS Sustainable?
3:19 - Average OAS Clawback
5:23 - Why You May Have Clawback
7:18 - How To Mitigate Clawback
10:14 - Income Silos

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DISCLAIMER: This presentation is for informational purposes only and should not be considered financial, investment, tax, or estate planning advice. All investments carry risk, and past performance does not guarantee future results. Any forward-looking statements are based on assumptions and may not reflect actual outcomes.

The content on this channel is for educational purposes only and does not provide specific investment or planning recommendations. Viewers should consult a qualified professional for retirement, tax, or estate planning guidance. Parallel Wealth and Adam Bornn are not responsible for any decisions made based on this content.

[J.FamGuy.M]

Hopefully, I make all the right decisions and still have OAS clawback. If I don't need it, I don't need it. If I do need, I hope it is still there.

[dvdvno]

It's surprising the number of people that just copy what other people do. I've seen people still working and having OAS clawback. I only found out about OAS clawback the year I retired at 65 yrs 11 months. Luckily I had RRSP room to lower the taxable income for that year.

[HandsomeDevlin]

There should be a Single and Married threshold. When one spouse passes and assets transfer to the surviving spouse, the threshold can be reached much easier even though expenses dont reduce a lot. The surviving spouse already potentially loses some CPP and other Pensions.

[brucegarrod]

If a 65 year old individual has $91K taxable income, their marginal rate on the next dollar (in Ontario) is 34%. If that next dollar is OAS, they give up another 15%. There's not much left of that $720 cheque.

[chrisjeanneret]

I would have been affected by the increase in eligible age to 67, so maybe I am biased, but I think that reducing the indexation of the clawback threshold would be fairer. Changing the eligible age messes up the integration of OAS with CPP.

[CraigBrooks-strz]

You said that OAS clawback is based on taxable income, but I thought I read that it was based on net income. I have significant deductions between net income and taxable income (northern living) so it’s important for me to know. Just became eligible for OAS and trying to figure out how much to pull out of RSP‘s and avoid or minimize clawback. It appears if line 15000 to be gross income before deductions.

[rossbone]

The word austerity does not exist in the government dictionary, .. also, the government rewards failure and penalizes success, ..😡

[markust]

I want to apply for Oas, Im 68 but i am also still working about $35 k a year but want to retire. I also have a locked in RRsp (low) and my TFsa is on the low end, and i also get a spousal death benefit of 3K a year. Is there any reason i should get off my ass and apply for OAs. Cause i know or fear (Govt.) they are going to change the rules soon.

[snowhite]

Adam could you do a video on OAS clawback for people who deferred there OAS until 70. I thought you previously said that there is a higher clawback ceiling for people who deferred. 2024 the minimum clawback starts at 90, 997 is that true for the deferred people as well.

[debbie]

Does the OAS income recovery threshold increase yearly based on the same cost of living increase to CPP/OAS? How can you plan around this if it is somewhat random?

[J.FamGuy.M]

Topic idea: scenario 24 y/o, 50k gross, no debt, 5% match rrsp, no fhsa. Goals: 1st home and retirement.

When I got into the market, homes were half the price they are now but we never had the option of FHSA. The tax free option seems like a real good idea. Combined 40k tax free and 35k tax deferred.

[gordthompson]

So over all, those that paid the most in taxes into the system will receive the least out. People that did every right worked hard saved and now have a great retirement income now get penalized. If you need to cash an RRSP to pay for a new roof or something you have no choice on they take away your OAS. Ridiculous

[pauljose]

Adam, when was OAS at age 67? I know there was a plan to increase it to age 67 during the last decade however that proposal was cancelled in 2016.

[rss]

would be interesting to see what happens if you retire in another country, Do they take any of your pensions away?

[TheHomeDesigner]

I got clawed back OAS when I turned 65 because I cashed in some investments. The next year my pension totals were less. Does anyone know if my OAS will be increased in future years???

[davecarpenter]

Really though.. someone with 90k/yr in their retirement age should be getting a social support payment ?
Lower the clawback to 60 or 70k (which is still generous)

[garth]

OAS clawback is nothing but a tax on success...a tax that you already paid your whole working life. I could have been like a lot of people and spent as much as i earned instead of saving and investing. I worked hard and for that i was hit hard in taxes..some years at 42% marginal rate. Now some folks think that i should fund their retirement as well..no.

[salicia]

In view of the way the liberal and NDP coalition has brought us to the current level of indebtedness and current tax revenues allocated to pay interest on that debt, I will personally be surprised if our retirement endowments last another 10 years. We are in for a rude awakening when the debt levels start to really adjust our economic reality. Those who voted for a tax and spend government may indeed have time to reflect on the consequences.

[paulpoco]

Would be screwed if OAS went from age 65 to 67 years old.

[williampell]

The OAS clawback is applied unfairly. Suppose TaxpayerA and TaxpayerB have identical incomes with little or no OAS clawed back. Now give B a 30k capital gain and a 30k prior year capital loss. Clearly B has no more income than A, in fact arguably less due to the time value of money. Nevertheless B will be hit with a nasty OAS clawback.