Old Age Security: Canada, OAS, Pension, Calculator, 2022

OAS - Old Age Security Canada

Planning And Creating A Retirement That You Want

Old Age Security Canada info for 2022

Old Age Security Canada - Ascendant Financial Inc

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Are you interested in learning what the OAS payout is for 2022? The amount you receive from this Canadian program depends on a few individual factors. Just as well, there are some strategies worth knowing to get the most from your OAS payment. Let's break down everything your need to know about OAS in 2022 and how to think wisely to supplement your income during retirement. Whether you are a current pensioner or just being prudent and thinking ahead as part of your retirement planning strategy, the more you understand this program, the better off you will be.

What is OAS Old Age Security in Canada?

Old Age Security or OAS is a type of government income for older Canadian retirees. It is available to all Canadians over the age of 65.

An individual's OAS pension is determined by the length of time one has lived in Canada after turning 18 years of age. It is a taxable income that is also subject to a “recovery tax” if one's net annual income is higher than the net income threshold that has been set for the tax year. This is referred to as a “clawback” (OAS clawback). Now that sounds scary, and for many, it can be. That means if your income is up in a given year, then basically, you will not qualify for any of the OAS income. This can happen if you sell a rental property, have some capital gains or some other income event that puts you over the threshold in any given year.

Old age security supplement

Those who qualify for OAS pension may also be eligible for the untaxed Guaranteed Income Supplement (GIS) allowance. All of these benefits, including OAS, are based on your age, marital status, and income. This is sometimes referred to as the old age security supplement.

Unfortunately, if a Canadian senior has too much income in a given year, the government will claw back the amount they receive. That's why seniors need to have an additional insured retirement plan set up to draw out tax-free income. This can be a massive benefit for your retirement, as you can keep your OAS income while still drawing out untaxed income from an IRP. Careful planning from a year to year basis is needed to look at your various income sources that are taxable, such as RRSP or RRIF withdrawals, rental or dividend income, or the sale of property in a given year.

Old age security doesn't have to be so complicated, and neither do insured retirement plans. Sign up for our on-demand webinar training today to learn how to take control of your finances so you can create a stress-free retirement plan today.

How Much is OAS for 2022?

The OAS changes slightly throughout the year every three months. Currently, the OAS increase for January to March 2022 is a benefit of $615.37. Just as well, the lowest-income seniors will be able to receive an old age security supplement called the OAS Guaranteed Income Supplement or GIS. This supplement maxes out at about $919.12 each month. Those who receive both OAS and qualify for GIS could receive an average of $15,654 each year from these sources. However, your income must be less than $129,075 to receive even a penny of OAS, anything above, and you are no longer entitled to any portion of it. Those with annual taxable income greater than $77,580 begin the clawback process and slowly strip back the amounts you would earn from this Canadian Retirement Pension.

Make sure to visit the Canadian government website in March and every three months after to see how payments will change throughout the year.

It is also important to note that you can defer the OAS income payments to a maximum of five years to age 70. This will give you a boost in OAS income, and for those working longer, it could reduce the clawback potential they may experience during those working years. With better health and medical breakthroughs, many recognize that they both can and want to continue working and contributing even past age 70.

Is OAS going to go up in 2022?

In light of Canada's crazy economic times from the Covid 19 pandemic, many are wondering as they look at retirement or are currently receiving OAS income if they will see an increase. The primary driver of any increases is the consumer price index (CPI). If the basket of goods and services that people regularly use in the country is rising, then there is a good chance your OAS payment, if you qualify, will rise with it. In addition, there is a whopping 0.2% increase from January 2022 to March 2022. You can keep tabs on these increases on the government of Canada website and consider marking your calendar as they review them every January, April, July and October.

OAS Calculator

OAS payment rates are calculated every three months to ensure that the payments match the costs of living measured by the CPI. If the cost of living in an area increases, the OAS's monthly payment rates will go up. If the cost of living decreases, however, monthly payments will not decrease.

If you'd like to calculate your unique OAS deferral, you have some excellent options. Tridelta Canada has a free OAS calculator that you can use. All you need to know is your date of birth, the date you started OAS, and your OAS estimate at age 65. You'll be able to calculate your OAS enhancement rate, monthly payment, and annual payment easily.

Just remember, it will always be based on your actual income for the year… the OAS clawback is always looming!

Partial OAS Pension

OAS is designed for people who have been in Canada for a long time. You have to have lived in Canada for 40 years after the age of 18 to get the maximum possible benefit. So if you only lived in Canada for 20 years after age 18, your benefits would be cut in half. It's basically a partial payment adjusted for how many years you have contributed to the giant landmass we all know and love called Canada.

Old Age Security Experts

At Ascendant Financial we have expert financial advisors and coaches that can help you make a retirement plan that works and is insulated from market risks. Take control of your retirement plan today.