Mark you do an excellent job explaining important retirement topics. I really appreciate your content. You are one of the very best personal investment TH-cam channels. 👍
Thanks Mark, found your channel and always interested in retirement planning. Good information. Personally, I decided to take my OAS now (66) as I pushed out my CPP and found that once getting both CPP and OAS together, my clawback would be larger, and was pointless to defer my OAS. My case is probably an outlier, but someone in a similar situation may need to consider impact of CPP and how to manage this together with OAS. This is because I have a defined benefit pension, which is becoming less and less common, except for government employees.
Thank you for the comment! Yes, every situation is unique so taking a customized approach makes the most sense. If you have high amounts of fixed income in retirement (DB pension, CPP, and large RRIF minimums), you may not be able to avoid OAS clawbacks. A good problem to have, but a problem nonetheless. Thanks for watching the videos. I am glad you enjoy them. :)
If Johnny did know that he was selling his cottage in that year, he could have just left his RRSP alone, or take out the minimum from his RRIF for the year. When I retired I had enough RRSP contribution room to shelter my severance so that I didn't have any OAS clawback.
Just a quick question, you mentioned that OAS claw back is based on NET income. I always thought Net income was after tax. In your illustration it looks like OAS claw back is calculated on gross income, which is all income including dividend gross up. Just wondering if you could clarify this. Thanks
Thanks for the question Brian. Net Income is calculated after certain deductions are taken out but but before taxes are calculated. OAS Clawback is calculated based on income on Line 23400 - Net Income Before Adjustments. OAS Clawback is shown on Line 23500. Taxable Income is shown on Line 26000. Finally, taxes payable (federal) is shown on Line 42000. Here is a link to the T1 General so you can see how the return flows section by section. This is for Ontario, where I live and where most of my clients are: www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/ontario/5006-r.html
If your spouse passed away now you are classified as single Therefore it’s puts you into a higher tax braced. Widowed person should have a different tax bracket, they didn’t chose to be in that position. Especially after all the hard saving for there retirement years..
I have a "failed retirement" where I am receiving CPP and WAS receiving OAS until the claw-back of the last 2 years where I now get nothing for OAS due to contract work. However, my contract is rapidly coming to an end in 3 months or less and will need that OAS since the CPP + OAS since this all the income I will have to survive on. The contract income has paid for living expenses in Canada and taxes with very little left over. Since I have no investment or other income, I cannot afford to live in Canada and will likely move to Mexico or the Philippines to spend the last 10 years of my life. Since this apparently based on the T4 results, it will probably take over a year before it is registered that I have no other income and am well below the $86k threshold. Is there a way to hasten this process to get back the OAS and GIS, since living the first year on CPP alone will be extremely frugal, if not impossible? Any help, much appreciated.
Hi Alan, thanks for your note and sorry to hear about your current circumstances. I recommend completing the T1213 form. This is an application to the government to reduce your OAS witholdings in light of the fact that you are now out of the OAS clawback zone. If you have trouble filling it in, place a call to Service Canada for assistance. Here is a link to the form again: www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213oas.html
Interest rates are in double digits in Mexico and everyone is flocking there to make a fortune each year with no risk as the currency is strong due to their higher rates. It beats living in Brazil where interest rates are high but a suspect currency.
Mark you do an excellent job explaining important retirement topics. I really appreciate your content. You are one of the very best personal investment TH-cam channels. 👍
Thanks Max that’s very kind of you
Thanks Mark, found your channel and always interested in retirement planning. Good information. Personally, I decided to take my OAS now (66) as I pushed out my CPP and found that once getting both CPP and OAS together, my clawback would be larger, and was pointless to defer my OAS. My case is probably an outlier, but someone in a similar situation may need to consider impact of CPP and how to manage this together with OAS. This is because I have a defined benefit pension, which is becoming less and less common, except for government employees.
Thank you for the comment! Yes, every situation is unique so taking a customized approach makes the most sense. If you have high amounts of fixed income in retirement (DB pension, CPP, and large RRIF minimums), you may not be able to avoid OAS clawbacks. A good problem to have, but a problem nonetheless. Thanks for watching the videos. I am glad you enjoy them. :)
I never made more than 82k when I was working so I'm not worried.
If Johnny did know that he was selling his cottage in that year, he could have just left his RRSP alone, or take out the minimum from his RRIF for the year.
When I retired I had enough RRSP contribution room to shelter my severance so that I didn't have any OAS clawback.
The example was meant to be illustrative only, but you make a good point.
Just a quick question, you mentioned that OAS claw back is based on NET income. I always thought Net income was after tax. In your illustration it looks like OAS claw back is calculated on gross income, which is all income including dividend gross up. Just wondering if you could clarify this. Thanks
Thanks for the question Brian. Net Income is calculated after certain deductions are taken out but but before taxes are calculated.
OAS Clawback is calculated based on income on Line 23400 - Net Income Before Adjustments. OAS Clawback is shown on Line 23500. Taxable Income is shown on Line 26000. Finally, taxes payable (federal) is shown on Line 42000.
Here is a link to the T1 General so you can see how the return flows section by section. This is for Ontario, where I live and where most of my clients are:
www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/ontario/5006-r.html
If your spouse passed away now you are classified as single Therefore it’s puts you into a higher tax braced. Widowed person should have a different tax bracket, they didn’t chose to be in that position. Especially after all the hard saving for there retirement years..
This happened to me for the 2023 tax year, one time gain. I’m filling out a T1213OAS form right now. What year do I put on top of the form?
Hi Mary, the current year (2024)
I have a "failed retirement" where I am receiving CPP and WAS receiving OAS until the claw-back of the last 2 years where I now get nothing for OAS due to contract work. However, my contract is rapidly coming to an end in 3 months or less and will need that OAS since the CPP + OAS since this all the income I will have to survive on. The contract income has paid for living expenses in Canada and taxes with very little left over. Since I have no investment or other income, I cannot afford to live in Canada and will likely move to Mexico or the Philippines to spend the last 10 years of my life.
Since this apparently based on the T4 results, it will probably take over a year before it is registered that I have no other income and am well below the $86k threshold.
Is there a way to hasten this process to get back the OAS and GIS, since living the first year on CPP alone will be extremely frugal, if not impossible?
Any help, much appreciated.
Hi Alan, thanks for your note and sorry to hear about your current circumstances. I recommend completing the T1213 form. This is an application to the government to reduce your OAS witholdings in light of the fact that you are now out of the OAS clawback zone. If you have trouble filling it in, place a call to Service Canada for assistance. Here is a link to the form again:
www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213oas.html
Interest rates are in double digits in Mexico and everyone is flocking there to make a fortune each year with no risk as the currency is strong due to their higher rates. It beats living in Brazil where interest rates are high but a suspect currency.