The maximum OAS a couple can get is $19,600. Here’s how to collect all of it


Old Age Security (OAS) is a funny part of Canadian retirement planning.

Many Canadians assume they won’t receive it, or even if they do, they believe it won’t last many more years.

The truth of the matter is that for a couple, it can generate as little as $0 or as much as $19,600 a year if you receive full OAS and delay receiving it until you both turn 70.

The basics on the OAS are as follows. You will qualify for a full OAS:

1. If you have lived in Canada for at least 40 years after the age of 18. You will receive partial OAS if you have lived in Canada at least 10 years after age 18.

2. If your taxable income (your net income on line 236 of your tax return) is under $77,580 in 2019. For every dollar above this amount, you will lose 15 cents of OAS up to roughly $125,000, at which point your OAS will be fully clawed back.

3. If you delay receiving your OAS from 65 to age 70, you will receive 36 per cent more or a maximum of $9,815 a year.

There are some people with so much wealth from pensions, investment income or minimum RRIF withdrawals that they are far past the $125,000 a year in income and will simply not receive OAS. Having said that, there might still be some strategies to help.

On the other hand, there are many Canadians whose income in retirement will not be close to $77,000 and who will always receive full OAS benefits.

Senior couple examining their financesIf we start with the premise that you want to receive the most OAS possible, then you will be deferring OAS to age 70. This may or may not be the right decision for you. In general, it is the right decision if you are in good health and believe that you (and likely both of you if you are a couple) will live past age 85 and do not have immediate cash-flow requirements for OAS funds.

The risk is that if one person in a couple takes deferred OAS and the other passes away younger, the survivor is no longer able to split income and depending on their assets, that survivor may now have OAS clawed back, even on the larger deferred amount.

(As a sidenote, the CPP is a better deal as far as deferral past age 65 is concerned. If you defer CPP to age 70, it grows 42 per cent as compared to the 36 per cent growth of a deferred OAS.)

Getting back to the “How do I get the most” question, it is certainly easier if you are a couple as opposed to being single. The five best ways to maximize OAS would be:

First, split income as much as possible in order to ideally keep both individuals’ net incomes under $77,000. If you are able to fully split income, this means your household income could be $154,000, and you would still qualify for full OAS.

Second, use all tax deductions possible to lower taxable income. This includes making RRSP contributions if you have room. One trick is that even if you are over 71, you can possibly make a contribution to the younger spouse’s spousal RSP account if they are under that age. Where possible, be sure to deduct interest income on loans and investment expenses (when investing with an investment counsellor or in a fee-based taxable account). These deductions will not only lower your taxes, but if you are in the OAS clawback zone, they will add 15 cents of OAS for every dollar deducted.

Third, when drawing investment funds to cover your cashflow, consider drawing TFSA or non-registered assets which will not incur any taxable income, rather than drawing extra funds from your RSP, RRIF or corporate account.

Fourth, lower your taxable investment income. If you have taxable investments (non-registered accounts), be sure and focus on tax efficiency in this account. This would probably mean a focus on ETFs and stocks that do not have any or small dividend distributions, meaning a focus on growth stocks. Some ETFs now are structured not to distribute income for this purpose. There are still some REITs that do generate decent yields, but the yields are structured mostly as return of capital. One last thought is to either gift some of these assets to adult children if you won’t need them in your lifetime, or invest them in an insurance policy that will likely have a much higher after-tax return for your estate. If you don’t have the taxable assets in your hands, you will have a lower income.

Fifth, shift income earlier. If you are under 65 or if you are planning on deferring OAS, this would apply up to age 70. You may want to draw funds from your RRSP in the years before that income will qualify toward an OAS clawback. For example, rather than draw CPP and OAS at age 65, you could defer it five years, and in that time draw from your RRSP instead. This will allow you to have a lower RRIF minimum in later years, and possibly help to maintain full OAS at that time. There may also be capital gains on a second property or other unrealized investment gains that you might want to claim in a year prior to it affecting OAS clawbacks.

It is important to keep in mind that these strategies will all be beneficial to maximizing OAS, but still may not be the right strategy overall for you. What is interesting is that all of these strategies to lower taxable income can still apply to you regardless of the OAS strategy.

As you deal with retirement income planning in your late 50s and 60s, these tax and benefit strategies and ideas could easily add $100,000+ to your long term assets. Now is the time to think about them and to take the appropriate action for your personal situation.

Reproduced from the National Post newspaper article 30th April 2019.

Ted Rechtshaffen
Written By:
Ted Rechtshaffen, MBA, CFP
President and CEO
(416) 733-3292 x 221

Managing the Drawdown of your RRIF/RRSP


Many of us have worked hard all of our lives to build up our retirement nest egg in our RRSP funds. We’ve been successful enough to build a RRSP nest egg in excess of $1million to see us through our retirement.

Now we are at the stage of flipping the RRSP into a RRIF and managing the drawdown of our funds, which requires a balance between CRA’s required minimum withdrawal, lifestyle needs, longevity, and tax efficiencies. Some things to consider include:

  1. You can flip your RRSP into a RRIF as early as 60 and as late as 71. Once you’ve changed it into a RRIF you must make the minimum withdrawals per CRA or face penalties. You can leave your funds as RRSPs during your early 60’s, still make withdrawals to meet your lifestyle needs, but not have to meet CRA imposed minimum standards.


    At age 65, when you are eligible for a pension income tax credit, you may want to consider transferring a portion of your RRSP to a RRIF to take advantage of this credit.

  2. Historically we’ve been taught to leave our RRSP untouched as long as possible to maximize the benefit of the deferred tax bill. However, you are eligible for Old Age Security (OAS) payments after age 65, which are income tested.

    You might be better off to start your RRSP withdrawals in your 60’s so that when age 71 hits and you have an annual Required Minimum Distribution (RMD), you’ve reduced the total RRIF and subsequent annual RMD to the point that it is under the income threshold for OAS clawback. Alternatively, if your RMD is large enough that your OAS will be clawed back 100% for the balance of your life, you could trigger a one-time liquidation of a portion of the RRIF now, to get your RMD below the OAS clawback threshold.

    Finance professor Moshe Milevsky says Canada’s Required Minimum Distribution (RMD) rates from tax-sheltered accounts are higher than most countries, including the U.S. At age 75, Canada’s RMD is 7.85%, versus 4.37% for the U.S., 6.31% for the U.K., 6% for Australia and 3% for Ireland. Canada’s RMD is also highest at age 90: a whopping 13.62%, versus 8.77% for the U.S., 6.31% for the U.K., 11% for Australia and 3% for Ireland. (Financial Post)

    There are tax strategies that you can use to reduce the taxes on a one-time significant RRIF withdrawal.

  3. When the first spouse passes away, the RRIF/RRSP passes to the surviving spouse (assuming that is the beneficiary choice) without tax consequences. However, when the second spouse passes away the remaining RRIF/RRSP is dissolved and taxed at normal tax rates. In Ontario, the estate of an individual leaving a RRIF/RRSP greater than $509,000 to anyone other than their spouse will be subject to the maximum tax rate of 49.53%. Imagine an estate with a RRSP/RRIF of $1million – and half goes to Ottawa.

    There are tax and estate planning strategies to help manage this tax bill – either before you get to that stage or at the time of passing.

Most of us have a goal, while we are still employed, to build up our retirement nest egg to fund a comfortable lifestyle in our retirement. Once you have retired, you now need to manage the drawdown in a tax efficient manner. It’s not just a matter of calculating what your minimum RMD is each year.

If you work with a financial planner, discuss with them options you can put in place now on how to minimize your taxes and maximize the value of your estate. TriDelta Financial has expertise to assist you with tax strategies, which may save huge dollars. Contact us for a no obligation consultation.

Gail can be contacted by email at and by phone at (905) 399-2035.