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.
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.
Totally agreed, heartless. Government kept their CPP calculation secret to trapping everoneI and hope you fall into it. I tried to take my CPP at age 60 leveling my income but then get hit with the lower max CPP , including the SURVIVOR CPP ! I am ok with 36% reduced on my CPP max, but not with my SURVIVING CPP! In my spouse CPP, it indicaded his survivor CPP receive around $650 but because I took my CPP age 60, after he passed away I just got around $80 more on top of my CPP for it because they used my 36% decducted max CPP in stead of full max CPP amount!!!!
@@thamc5862 Taking CPP at 60 does not reduce the survivor CPP, it can actually increase it. CPP is always recalculated based on age 65. The survivor benefit is often very small unless they have almost no CPP
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.
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.
My comment has nothing to do with tax credits. There are three major lines on a T1 return - the gross total income, net income and taxable income. There are deductions taken after gross total income before net income and again (called adjustments) after net income before taxable income. Appears the OAS clawback is based on the net income. I also have deductions/adjustments (northern living) between net income and taxable income. (many do not so net and taxable income are the same for them). Was hoping it was taxable but alas its net
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.
You9 must be age 65 or less as Trudeau got rid of it for anyone aged under 66 at the time prorated to age 65 retirement back then. The Conservatives could recind it in the 2025 election year
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?
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.
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.
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
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???
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.
@@garth217 been there, done that. OAS was intended for the needy, there are plenty of them. Low income workers who spend their income on living and do not have savings. Back in the day, there were stories of impoverished retirees eating dog food, OAS was introduced to eliminate that. Since then, somehow it has become a right. I will vote for any politician that starts the clawback at 70k and completes the clawback at 90k.
It was raised to 67 by the Harper government and then lowered back to 65 by Trudeau after the election in 2015 because he made the promise to lower it to buy votes.
@@James_48 It was a phased in approach so as not to badly affect pending retirees, So the implementation would have been spread over a few years. Harper would have served the country better if he had changed the thresholds instead.
@@rb239rtr you are correct about the phase in but I disagree it would have made things better. I would be in favour of lowering the clawback income threshold or raising the percentage of clawback but OAS is essential income for those who need it.
i agree that trudeau bought votes lowering back to 65, as altho i want oas at 65 (who wouldn't), one needs to look at the reality of canada's financial books. the low hanging fruit is the 10% bump to those 75+, so i think that s/b the first of truduh's bribes to go
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)
Perhaps, but they have also paid into the benefit via taxation for all of their working lives, unlike some who will collect it despite never having paid meaningful income taxes in this country ever.
@@James_48 thanks even had people in our work group that are out of country working and wonder how long they can stay away and still qualify for pensions in Canada
@@91rss for OAS there is a minimum residency of 10 years past the age of 18. After that an individual can receive 1/40 of standard OAS for every year of residency. But things subject to agreements with the countries retirees are living in.
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.
2nd scenario, former home owner who has been renting for 4 years and want a home. 3rd scenario: 50 y/o couple, not sure if they want a home but considering FHSA.
I am not a rich man, but I think the OAS needs a serious review. The program costs $55 billion a year, it was meant to help poor people. I would vote for anyone who implements a lower and steeper clawback. Also no income splitting on this stipend.
In my opinion if someone is pulling in $90 g’s a year there is no reason to get OAS. Keep it at 65 for the poor souls out there that need it. I think if someone is getting $60g’s or more it should eliminated.
There'a big difference between someone pulling in 90 G's per year that owns a house vs someone that rents. If you're renting 90 G's is not as much as it seems.
@@robertp8896 Even so it's not like at nearly 91K a year (182K for a couple) you are going to lose your OAS altogether, you are only going to lose 15 cents on the next OAS dollar. You wouldn't think that would wipe people out.
So what you're saying is, there's no reason to be successful in life and work. Sorry but I paid for my own education, paid for private Healthcare and a ton of taxes. OAS is funded by taxpayers..everyone should get the same amount or base it on tax contributions like they do with CPP contributions
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.
without getting too into details, that is typical of a liberal gov't. promise all these goodies to buy each and every demographic (seniors, climate alarmists, lgbtq alphabet, etc), put the country against the wall. after everyone get their heads outta the sand, realize we gotta clean up books, vote conservatives in who take away goodies. after a few years people say, hey, the libs gave and cons took away, we gotta get the libs back in and the vicious circle goes on. We need economists to run the country, not substitute drama teachers
For all you folks supporting OAS clawback here is food for thought. The top 1% of income earners pay 46% of all income taxes. The top 20% of income earners pay 64.4% of all income taxes. So you paid more than the vast majority of people...yet you don't get treated the same as the rest of Canadians. Sorry not Sorry
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.
You just stick it all into gold bars and just before you die give them all to your heirs thus avoiding both probate and death/estate taxes. My father and my grandfather both did this. I inherited 13,000 cases of 1968 Seagram's whisky.
Why this even an issue for "rich" seniors? If you earn 148k single or 300k for a couple, you sure don't need any OAS! You're already losing almost 1/2 of it to taxes anyways.
@@garth217 Taxes are for providing public services, not supplementing retirement income. CPP is the better plan because it's funded ... and should be enhanced. GIS should be boosted to protect the most vulnerable, but you're right, OAS should be terminated. I certainly won't continue in its present form...the Government is broke and some things will have to give.
I don't understand why folks don't realize that we all pay for this (at least many of us pay for this). There is nothing wrong with the OAS being clawed back from folks who don't need it because they have income beyond the limit ($90K?). If all the $90K+ folks find ways and means to avoid/mitigate OAS clawback, we have to realize that this will only increase the need for higher taxes for all (most) Canadians to pay for the wealthy who choose to get every dollar they can from the government (even though they have no need for it). Come on folks!
Only 8.3% of OAS recipients face any clawback at all. If a person has no pension, and saved diligently for their retirement, the clawback is a penalty for hard work.
@@bobklatt9826 CPP is for hard work (assuming the income was reported), not OAS. OAS is a social assistance program for elderly folks in need. Canada's debt is just under $3 Trillion. That's over $100,000 for every man, woman and child. Yet, we want to find ways for the wealthy to avoid the OAS clawback? This does not compute!
There is also a clawback for Age Amount. Federal tax credit. Line 30100 Age Amount $8396. Net Income threshold (line 23600); $42,335. Every dollar over this amount reduces this $8396 by 15 cents. Over $98309 there’s none left. I’m in NB. NB tax credit. Line 58080 Age Amount $5615. Net Income threshold (line 23600); $41799. Every dollar over this amount reduces this $5615 by 15 cents. Over $79233 theres, none left. I'm below $79233 taxable income, and for 1 extra dollar income, I would pay 27 cents in taxes. That is based on my 2023 income tax return. I lose more than the marginal tax when you take into account those clawbacks for Age amount.
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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.
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.
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.
Surviving spouse gets slaughtered in Canada.
Totally agreed, heartless. Government kept their CPP calculation secret to trapping everoneI and hope you fall into it. I tried to take my CPP at age 60 leveling my income but then get hit with the lower max CPP , including the SURVIVOR CPP ! I am ok with 36% reduced on my CPP max, but not with my SURVIVING CPP! In my spouse CPP, it indicaded his survivor CPP receive around $650 but because I took my CPP age 60, after he passed away I just got around $80 more on top of my CPP for it because they used my 36% decducted max CPP in stead of full max CPP amount!!!!
@@thamc5862 Taking CPP at 60 does not reduce the survivor CPP, it can actually increase it. CPP is always recalculated based on age 65. The survivor benefit is often very small unless they have almost no CPP
Thanks Adam.
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.
In America they consider upper middle class as half a million a year and up but in Canada 91K a year will barely keep you alive.
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.
Net
Tax credits are not tax deductions against total income.
My comment has nothing to do with tax credits. There are three major lines on a T1 return - the gross total income, net income and taxable income. There are deductions taken after gross total income before net income and again (called adjustments) after net income before taxable income. Appears the OAS clawback is based on the net income. I also have deductions/adjustments (northern living) between net income and taxable income. (many do not so net and taxable income are the same for them). Was hoping it was taxable but alas its net
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.
You9 must be age 65 or less as Trudeau got rid of it for anyone aged under 66 at the time prorated to age 65 retirement back then. The Conservatives could recind it in the 2025 election year
The word austerity does not exist in the government dictionary,.. also, the government rewards failure and penalizes success,..😡
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?
Yes
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.
Coming in a few weeks.
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.
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
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???
Yes it will. The capital gains from selling your investments will only negatively impact your OAS for one year.
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.
The entire progressive tax system is a tax on success, especially when you die and they take 53.5% of your RRSP's.
I feel the same way as you on this matter, well said.
why dont't you ask for all of your employment insurance taxes back too?
@rb239rtr why don't you get a job and contribute
@@garth217 been there, done that.
OAS was intended for the needy, there are plenty of them. Low income workers who spend their income on living and do not have savings. Back in the day, there were stories of impoverished retirees eating dog food, OAS was introduced to eliminate that. Since then, somehow it has become a right. I will vote for any politician that starts the clawback at 70k and completes the clawback at 90k.
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.
It was raised to 67 by the Harper government and then lowered back to 65 by Trudeau after the election in 2015 because he made the promise to lower it to buy votes.
@@harveythompson6951well that, and it was abhorrent that Harper raised it.
@@James_48 It was a phased in approach so as not to badly affect pending retirees, So the implementation would have been spread over a few years. Harper would have served the country better if he had changed the thresholds instead.
@@rb239rtr you are correct about the phase in but I disagree it would have made things better. I would be in favour of lowering the clawback income threshold or raising the percentage of clawback but OAS is essential income for those who need it.
i agree that trudeau bought votes lowering back to 65, as altho i want oas at 65 (who wouldn't), one needs to look at the reality of canada's financial books.
the low hanging fruit is the 10% bump to those 75+, so i think that s/b the first of truduh's bribes to go
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)
Perhaps, but they have also paid into the benefit via taxation for all of their working lives, unlike some who will collect it despite never having paid meaningful income taxes in this country ever.
@@salicia4800 You're not wrong.
GIS is for low income Canadians which supplements OAS benefits.
90K a year is barely enough to survive on. I know many who use the foods banks that make more than 90K a year.
would be interesting to see what happens if you retire in another country, Do they take any of your pensions away?
Adam has at least one video where he discusses this.
@@James_48 thanks even had people in our work group that are out of country working and wonder how long they can stay away and still qualify for pensions in Canada
@@91rss for OAS there is a minimum residency of 10 years past the age of 18. After that an individual can receive 1/40 of standard OAS for every year of residency. But things subject to agreements with the countries retirees are living in.
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.
2nd scenario, former home owner who has been renting for 4 years and want a home.
3rd scenario: 50 y/o couple, not sure if they want a home but considering FHSA.
did OAS clawback if I retire abroad?
Depending on which country. For example, if retired and live in US, no clawback
@@jimchen4662 do you know China? can I enjoy no OAS clawback and 25% tax on my RRSP?
China, yes, there is clawback.
Is this based on a couple or single?
Single. With income splitting you can double the numbers before OAS claw back starts for a couple.
I am not a rich man, but I think the OAS needs a serious review. The program costs $55 billion a year, it was meant to help poor people.
I would vote for anyone who implements a lower and steeper clawback. Also no income splitting on this stipend.
It was meant to keep retirees in Canada because most are leaving the country due to the high cost of living.
@@nickyfurlano8531 implemented in 1951
In my opinion if someone is pulling in $90 g’s a year there is no reason to get OAS. Keep it at 65 for the poor souls out there that need it. I think if someone is getting $60g’s or more it should eliminated.
There'a big difference between someone pulling in 90 G's per year that owns a house vs someone that rents. If you're renting 90 G's is not as much as it seems.
@@robertp8896 Even so it's not like at nearly 91K a year (182K for a couple) you are going to lose your OAS altogether, you are only going to lose 15 cents on the next OAS dollar. You wouldn't think that would wipe people out.
So what you're saying is, there's no reason to be successful in life and work. Sorry but I paid for my own education, paid for private Healthcare and a ton of taxes. OAS is funded by taxpayers..everyone should get the same amount or base it on tax contributions like they do with CPP contributions
I agree. Insult to people who have little to nothing.
@johnnyboyvan no it's an insult to people who worked hard and were successful. Those people paid their whole life for others in their taxes.
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.
💯
CPP is not part of government
without getting too into details, that is typical of a liberal gov't. promise all these goodies to buy each and every demographic (seniors, climate alarmists, lgbtq alphabet, etc), put the country against the wall. after everyone get their heads outta the sand, realize we gotta clean up books, vote conservatives in who take away goodies. after a few years people say, hey, the libs gave and cons took away, we gotta get the libs back in and the vicious circle goes on. We need economists to run the country, not substitute drama teachers
For all you folks supporting OAS clawback here is food for thought. The top 1% of income earners pay 46% of all income taxes. The top 20% of income earners pay 64.4% of all income taxes. So you paid more than the vast majority of people...yet you don't get treated the same as the rest of Canadians. Sorry not Sorry
You might want to refer back to my response to your previous post.
If they dont claw the money needed , they'll just tax you a bit more.
@davecarpenter4917 my post is about some pay taxes their whole lives and in retirement still pay..while others did neither.
Would be screwed if OAS went from age 65 to 67 years old.
If y9u're under age 66 today.
16k less - no big deal
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.
You just stick it all into gold bars and just before you die give them all to your heirs thus avoiding both probate and death/estate taxes. My father and my grandfather both did this. I inherited 13,000 cases of 1968 Seagram's whisky.
Why this even an issue for "rich" seniors? If you earn 148k single or 300k for a couple, you sure don't need any OAS! You're already losing almost 1/2 of it to taxes anyways.
Pre-tax income of $90K/per annum is not an extravagant income for a single retiree in 2024 in Canada.
Too true.
Tell that to someone with the median income in retirement….
It's barely above the poverty line and renders you housebound in retirement with no disposable income.
IMO anyone with an income approaching $100k shouldn't "need" OAS at all and I fully expect things will be changing soon.
Why..they paid their taxes there whole life. Stop OAS entirely then.
@@garth217 Taxes are for providing public services, not supplementing retirement income. CPP is the better plan because it's funded ... and should be enhanced. GIS should be boosted to protect the most vulnerable, but you're right, OAS should be terminated. I certainly won't continue in its present form...the Government is broke and some things will have to give.
I could go through 100 grand in a week just tipping the blackjack dealers at the casinos. Take it if you can get it.
So we should all strive to have all of "our " OAS clawed back ,or at least some of it 😂 .
In that case the word would be stolen not clawedback.
The OAS clawback is unadulterated theft.
I wonder what % of your audience will be affected by this clawback? My guess would be 5%, maybe?
I would guess higher based on our conversations. Even if it's 5% - that's thousands of people. Knowledge is power!
Much higher because his audience pays attention to money.
@@ParallelWealth Most that go to you will be higher income
At least 90 percent as 91K is just pocket money today.
I don't understand why folks don't realize that we all pay for this (at least many of us pay for this). There is nothing wrong with the OAS being clawed back from folks who don't need it because they have income beyond the limit ($90K?). If all the $90K+ folks find ways and means to avoid/mitigate OAS clawback, we have to realize that this will only increase the need for higher taxes for all (most) Canadians to pay for the wealthy who choose to get every dollar they can from the government (even though they have no need for it). Come on folks!
I don't understand why some get the money just because they are 65. I paid into it by my taxes.
Well, if you started to collect when you were 45 or 55, you would be entitled to very little!
Only 8.3% of OAS recipients face any clawback at all. If a person has no pension, and saved diligently for their retirement, the clawback is a penalty for hard work.
@@bobklatt9826 CPP is for hard work (assuming the income was reported), not OAS. OAS is a social assistance program for elderly folks in need. Canada's debt is just under $3 Trillion. That's over $100,000 for every man, woman and child. Yet, we want to find ways for the wealthy to avoid the OAS clawback? This does not compute!
There is also a clawback for Age Amount.
Federal tax credit. Line 30100 Age Amount $8396. Net Income threshold (line 23600); $42,335. Every dollar over this amount reduces this $8396 by 15 cents. Over $98309 there’s none left.
I’m in NB. NB tax credit. Line 58080 Age Amount $5615. Net Income threshold (line 23600); $41799. Every dollar over this amount reduces this $5615 by 15 cents. Over $79233 theres, none left.
I'm below $79233 taxable income, and for 1 extra dollar income, I would pay 27 cents in taxes. That is based on my 2023 income tax return. I lose more than the marginal tax when you take into account those clawbacks for Age amount.
Yes, it's very unbalanced that they clawback the age amount at less than 1/2 the OAS clawback income threshold. 42k is far too low and 90k is too high
$43,127 for the 2023 tax year and $42,335 for the 2022 tax year.