OAS clawback - Here's how to avoid losing $8,000/year скачать в хорошем качестве

OAS clawback - Here's how to avoid losing $8,000/year

The OAS clawback could cost you $8,000 a year in retirement. Here's how it works and exactly how to avoid it. What is the OAS clawback? Old Age Security pays eligible retirees about $8,500 to $9,000 a year. It's FREE money from the government starting at age 65. BUT, if your income goes over roughly $90,000, the government starts taking it back. This is the clawback. For every dollar you earn over $90,000, you lose 15 cents of OAS. So if your retirement income is $100,000, you're $10,000 over the threshold. You lose $1,500 in OAS that year. Make $140,000? Your OAS is completely gone. You get zero. Here's who gets caught: Retirees with workplace pensions, CPP, AND big RRSP or RRIF withdrawals. You think you're just pulling money from your own savings, but every RRSP dollar counts as taxable income. Pull out $50,000 from your RRSP, add a $30,000 pension and $15,000 CPP - boom, you're at $95,000. You just triggered the clawback. Here's how to avoid it: Strategy one: Income splitting with your spouse. If your spouse is in a lower tax bracket, split eligible pension income. Drops YOUR income below $90,000. Strategy two: Withdraw from TFSA instead of RRSP when you need extra cash. TFSA withdrawals don't count as income. They're invisible to CRA. Strategy three: Do an RRSP meltdown in your early 60s BEFORE OAS starts at 65. Pull money out when you have lower income, move it to TFSA or non-registered accounts. Strategy four: Delay OAS to age 70. You get 36% more per year, AND you have five extra years to manage your other income sources without worrying about clawback. If you're making $100,000 in retirement for 20 years and losing $1,500 a year in OAS, that's $30,000 you're giving back to the government. Totally avoidable with proper planning. And if this helped you, don't forget to Like and Subscribe this video. If you live in Ontario and are planning for your taxes in retirement, scan the QR code to see if we're a fit.