How much do I need to retire in Canada?

A common rule is to accumulate 25× your annual expenses (the "4% rule"). Use the Solutech Retirement Planner to model CPP, OAS, and your personal savings rate for a Canadian-specific estimate.

What is the OAS clawback threshold in Canada?

In 2025 the OAS Recovery Tax kicks in when net income exceeds $93,454. For every dollar above that threshold, 15 cents of OAS is clawed back. The planner models this automatically.

When should I start CPP?

You can start CPP as early as 60 (with a reduction) or as late as 70 (with an 8.4%/year increase after 65). Delaying is usually advantageous if you expect to live past your mid-70s.

When can I claim Social Security in the USA?

You can claim Social Security as early as age 62 or as late as age 70. Claiming early reduces your benefit; claiming at Full Retirement Age (66–67 depending on birth year) gives your standard benefit; claiming at 70 maximizes it with an 8% annual increase. The Solutech planner calculates your Primary Insurance Amount and all claiming scenarios.

What is the difference between a 401(k) and Roth IRA?

A Traditional 401(k) lets you contribute pre-tax dollars and pay taxes in retirement. A Roth IRA lets you contribute after-tax dollars but withdrawals are tax-free. The Solutech planner models both with employer match and Required Minimum Distributions (RMDs) starting at age 73 (SECURE 2.0).

How much can I contribute to a 401(k) in 2025?

In 2025, you can contribute up to $24,500 to a 401(k) (or $30,500 if age 50+). Your employer may also add matching contributions. The Solutech planner lets you model various contribution rates and employer match scenarios.

CPP & Benefits7 min read

OAS Clawback Explained: How to Keep More of Your Benefits

What the OAS Recovery Tax is, how it is calculated in 2026, and the strategies — TFSA drawdowns, pension splitting, RRSP timing — that reduce how much you give back.

By Solutech·April 2026

What Is the OAS Clawback?

The Old Age Security Recovery Tax — commonly called the "OAS clawback" — is a mechanism that reduces or eliminates your OAS benefit if your net income exceeds a government-set threshold. For every dollar of income above the threshold, you repay 15 cents of OAS back to the CRA.

This is not a means test applied when you apply for OAS. Instead, it works retroactively: you receive your full OAS during the year, then repay the clawback amount on your tax return. The CRA may also adjust your OAS payments the following year if your prior-year income exceeded the threshold.

2026 OAS Clawback Threshold: Approximately $93,454 net income. The exact threshold is adjusted annually for inflation. Above this amount, OAS is reduced by 15 cents per dollar. OAS is fully eliminated at approximately $151,000 net income (for ages 65–74).

How the Clawback Is Calculated

The formula: (Net Income − Threshold) × 15% = Annual OAS Repayment

Net Income	Above Threshold	Annual Clawback	Monthly OAS Kept
$90,000	None	$0	Full (~$715)
$95,000	~$1,546	~$232	~$695
$100,000	~$6,546	~$982	~$633
$110,000	~$16,546	~$2,482	~$508
$125,000	~$31,546	~$4,732	~$320
$151,000+	~$57,546+	Full OAS	$0

Approximate figures for 2026. Threshold indexed annually. OAS amount shown is for ages 65–74 (~$715/month).

What Counts Toward Net Income?

The clawback uses your net income from line 23600 of your T1 return — before most deductions but after certain credits. Income types that count include:

Counts (increases clawback risk)

CPP and OAS benefits
RRIF/RRSP withdrawals
Employment income
Rental income
Pension income (DB, foreign)
Investment income (interest, dividends)
Capital gains (50% inclusion)

Does not count (OAS-safe income)

TFSA withdrawals
Life insurance policy payouts
Principal residence sale proceeds
Inheritance
Certain social assistance payments

Strategies to Reduce or Eliminate OAS Clawback

1. Draw from TFSA Instead of RRIF

TFSA withdrawals do not appear in net income. If your income is near the threshold, swapping RRIF withdrawals for TFSA withdrawals can keep you below the clawback line. This requires having built up TFSA room — another reason to prioritize TFSA contributions in your accumulation years.

2. Pension Income Splitting

Canadian couples can split up to 50% of eligible pension income (including RRIF income for recipients over 65) with a lower-income spouse. This moves income from your return to your spouse's, potentially reducing your net income below the OAS threshold. Splitting $20,000 in pension income with a spouse in a lower bracket can save thousands in clawback and tax.

3. RRSP Drawdown Before 65

If you retire before 65 and OAS hasn't started yet, those are years you can draw down RRSP (now at lower income) without touching OAS. Strategic early RRSP drawdown reduces the RRIF balance you'll have at 71 — and therefore reduces the mandatory minimum withdrawals that push income toward the clawback threshold.

4. Charitable Donations and Eligible Deductions

Certain deductions reduce net income and thus reduce clawback. These include RRSP contributions (if you're still eligible), union or professional dues, rental loss carryforwards, and northern residents' deductions. A financial planner can help identify which deductions apply to your situation.

5. Defer OAS (If Your Income Is Elevated Early in Retirement)

You can defer OAS up to age 70 for a 7.2%/year increase (up to 36% more at 70). If your income in early retirement is high enough to trigger clawback, deferring OAS until income normalizes — and collecting a larger, inflation-indexed amount — may be worth considering.

Model Your OAS Clawback Exposure — Free

Enter your projected retirement income and see exactly how much OAS you keep. Adjust OAS start age, RRIF vs. TFSA mix, and CPP timing to minimize clawback.

Model My OAS Clawback

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