To continue with the discussion of OAS, here is a good example on how one can structure his or her retirement planning using just income from OAS. Please email me if you think this is useful or not as I would really appreciate your feedback. My email address is razorback2628@gmail.com
Assuming you are aged 65 or
above, does not have Canada Pension Plan (CPP) income or willing to defer to
age 70 before collecting, have no other sources of taxable income, but have
lived in Canada for 40 years after the age of 18, you would be eligible to receive
$1,455.60 per month tax free.
If you are Married, both of
you will receive $2,217.18 per month in total tax free.
I have prepared various cash
flow budgeting scenarios, tax planning, stress-testing and even turned my
spreadsheet upside down to conclude that a couple can live reasonably well on $2,200
per month tax free, inflation adjusted. And in Toronto! And still keep my RRSP,
TFSA and other assets intact, at least until age 71!
The caveat is that you need
to own your own home (or be willing to share a place and pay no more than $800
per month in rent), in reasonably good health and must be a NON-SMOKER. I
included an occasional drink in my budget as well as a no-frills senior
discounted gym membership – both are keys to maintaining good health.
Willingness to work
part-time to earn no more than the magical $3,500 per year to afford a cruise every
now and then. Read the next paragraph to figure out why. Note, too, that there
are other social programmes such as Ontario Trillium Drug Benefit plan, Hydro
Rebate, Property tax credits and other tax benefits that you and your spouse
can qualify for at this income levels.
If you receive CPP and/or other
income, the GIS benefit is reduced by $1 for every $2 earned (Single) and by $1
for every $4 earned (Couple). In addition, there is also a 15% clawback
provision on OAS for net income above $73,756. Note that if you are employed,
the first $3,500 of income is also exempted from the GIS calculation.
Note that the information is
effective July 1, 2017: Payments are adjusted each quarter based on changes in
the Consumer Price Index (CPI) (i.e. goes up). There is also a form of
assistance called Allowance for Spouse aged 62 to 64.
Maximum
|
Single
|
Couple
|
OAS
|
583.74
|
1,167.48
|
GIS
|
871.86
|
1,049.70
|
Total
|
1,455.60
|
2,217.18
|
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