What Is OAS Clawback & How Do You Avoid It?

Old age security is a monthly government payment that can start as early as age 65, and can be delayed to age 70.

Depending on your income level, there will potentially be a clawback to your payment. Salaries, RRSP/RRIF withdrawals, pension payments, and several other streams of income will determine your income level.

There are ways to avoid OAS clawback by reducing your taxable income. Utilizing your TFSA, drawing down your RRSP before 65, incoming splitting, and other strategies will help you reduce your OAS clawback.

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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.

[jameshalliday]

The biggest thing to do is not die before you’re 65! I know it sounds crazy, but my mother died when she was 49 and my dad don’t remarry. He spent his whole life making maximum RRSP contributions and saving for retirement. Retired at 63 and was reasonably set up. Got a brain tumour and died just before he turned 65. Never collect a dime of CPP, OAS and barely touched his RRSP so ended up losing 50% of what he’d scrimped and saved for his whole lifetime to his least favourite thing in the world: TAX. He’d deferred paying ~30% on that money and ended up paying ~50% instead.
Long story short: Don’t put off everything for retirement. If you’re in good health when your old you can (and likely should) just work a bit longer to keep enjoying life.
Great videos, by the way. With no parents to discuss this with it’s nice to hear some advice/perspective from someone that doesn’t directly have their own financial interests in mind. (ie banks)

[gerardacronin]

Good explanation of the basics. As a single person, I’m very frustrated that couples get so many opportunities to reduce their taxes which are not available for singles. Somebody needs to tell the government that the cost of living for one person is more than 50% of the cost of living for two.

[akaCamo]

Thank you for making these videos. I am thinking of cashing out my small RRSP before I hit age 71 in a couple of years and have to turn it into a RRIF. I never thought this particular video about OAS clawbacks would apply to me as my income would never be over $79000. I decided to watch it as part of the 5 part series. Now I realize that cashing in my RRSP all at once would put me in the situation where I would lose a year’s worth of OAS payments due to full clawback. I will do it over the next couple of years now instead. You just saved me a lot of money. Already a subscriber. Thank you.

[garth]

One of the best commentaries on financial advice on the Net

[bruceshepley]

Nice video! The tax clawback is essentially like having your tax bracket increase by 15%. So instead of being in the 30% bracket, you are essentially in the 45% tax bracket until you reach $129, 000. Your suggestions are bang on!

[lindabradley]

Your right, there isn’t enough info on line re taxes and financial planning! I am in the industry and I am really loving your videos. Clear, concise and, easy to understand. Definitely recommending others watch them. Keep up the great work and thanks!

[davidedepaiva]

If you have a private pension and RRSPs. You need to watch this.

[ddavidson]

As I have said before I think people worry far too much about OAS claw back. It seems to me that if you have over $129, 000 a year in retirement income, almost $11, 000 a month for a single person or double that for a couple, and your $600/month OAS is entirely clawed back then I would say you have little to worry about financially in your retirement. Of course plan your finances to reduce claw back if you can but it seems like a high class problem.

[pokergeniusordonkey]

I really like your videos. I like that you emphasized the Capital Gains problem because that seems to be the most common way the clawback would ever affect any average Canadians.

I'm shocked that incomes as high as 80, 000 are able to collect the full OAS. I know we're not discussing government policy, but I think people should consider themselves extremely fortunate that the OAS clawback doesn't start at a much lower level.

[MegsCarpentry-lovedogs]

I had to return to a few of your video's to refresh information forgotten and sometimes looking at the other vids adds more information to the overall learning process...so appreciate having the vids to return to to help understand where things fit in the overall estate planning. 👍🇨🇦

[gordthompson]

This clawback is a prime reason to take CPP at 60. No point in waiting till 65 to get more CPP only to loose your OAS or part of it.

[finneganmagee]

Great video. Don’t see anyway I see any OAS unless I empty my RIF before I’m 70. Not being able to income split is a killer.

[canadamike]

You should explain on a tax return the difference between Gross income and Net income as the clawback is based on Net Income after certian allowable deductions right ?

[guillermo]

Just what the doctor ordered! You are hired!

[jb_makesgames]

Your video are some of the best especially for Canadians.

[Moluccan]

Living proof of OAS clawback. 66 years of age, Employment + pension income + large RRSP withdrawal = $100, 000.00+ ‘income’, consequence, $2, 200.00 repayment to CRA, not to mention $9000.00 withheld from RRSP withdrawal. Ouch. Then, submit a T1213 CRA form declaring income for current year will be well under the threshold to stop continuing clawback.

[cheungd]

Excellent background and tips and tricks information. Thank you!!

[LivingTheLifeRetired]

This was a really great video. I started watching a couple weeks ago and have learned a lot.

[ExcellentDude]

As always great information presented clearly! Thanks!

[ryanroberge]

Hello, for the OAS clawback you perhaps should mention that it is based on net income -- not gross -- it is not that clear.