February 2018 – Discuss these tips with your tax advisor to maximize your OAS (and minimize income taxes):

•Do you expect income over $75,910 in 2018 (the income threshold for the dreaded OAS Clawback)? Perhaps delay starting  OAS until your income is lower.  Seniors can delay OAS until age 70. If you delay, you can increase your future monthly payments by 0.6% per month for every month after age 65 — to a maximum of 36% at age 70. (Similarly delay your CPP to reduce your taxable income for OAS clawback reasons, or to when you need a larger lifetime indexed pension)

• Limit exposure to dividend investments or hold these in a registered account. OAS clawback is based on net income, which includes dividends received from Canadian corporations on a grossed-up basis.

• Consider using corporate-class mutual funds which generally have lower distributions than mutual fund trusts.

• Consider Tax Efficient Systematic Withdrawals (TSWPs) from your mutual funds to create and minimize tax deferred income.

• Consider basing RRIF withdrawals on the younger spouse’s age to reduce the amount you need to withdraw annually.

• If you are 65 or older, split your RRIF, CPP or pension income with your spouse or common-law partner.

• Consider withdrawals from your Tax Free Savings Account