Smart Tax Strategies for Retirees: Avoid the OAS Recovery Tax

Smart Tax Strategies for Retirees: Avoid the OAS Recovery Tax

 Old Age Security (OAS) is an income benefit that is paid to Canadians once they reach the age of 65.   If your individual income is over $79,845 for 2021, you will have to start to pay back your OAS at a rate of 15% for each dollar over $79,845. This tax recovery is often called the clawback. It’s smart tax planning for retirees to arrange their income to avoid this clawback if possible. Some strategies to review are:  Income split with your spouse/CLP (Common Law Partner) Tax effective non-registered investments Review the start date of your RRIF Use the younger spouse/CLP’s age for RRIF payments Use TFSAs Trigger large capital gains prior to age 65 Defer OAS How do you collect Old Age Security?  To collect Old Age Security (OAS), the criteria is: Age 65 or older Citizen of Canada Resided in Canada at least 10 years since the age of 18 To get the maximum OAS benefit you must have  resided in Canada at least 40  years after the age of 18. resided in...
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