The OAS Trap Most Canadian Retirees Don't See Until July

OAS Clawback 2026 - Why Your July Cheque Quietly Loses $1,350 Free TFSA contribution-room Tracker: https://hudsonbayfinance.ca/go/yt Paid links: Wealthsimple (referral) + Amazon (affiliate) - my opinions. 👉 Wealthsimple - manage your retirement cash + $25 bonus on a $100 deposit: https://wealthsimple.com/invite/HTN0SP Books that shaped this video (paid links): 📖 Reboot Your Portfolio by Dan Bortolotti (Canadian-built portfolio framework that carries through to RRIF conversion): https://amzn.to/4jpZPLF 📖 Quit Like a Millionaire by Kristy Shen and Bryce Leung (Canadian-built withdrawal sequencing math): https://amzn.to/4uKpDY5 📖 The Psychology of Money by Morgan Housel (retirement-decision behaviour under uncertainty): https://amzn.to/4sv4Jef 00:00 - OAS clawback 2026 explained 00:40 - What income triggers OAS clawback 01:50 - Line 23400 vs line 23600 OAS recovery tax 02:54 - OAS clawback threshold 2025 2026 July pivot 04:11 - When OAS clawback hits your monthly cheque 05:08 - Form T1213 OAS reduce clawback at source 06:40 - OAS clawback example $100000 income retiree 08:28 - How to reduce OAS clawback to zero 08:45 - Pension splitting Form T1032 OAS clawback 09:15 - TFSA withdrawals OAS clawback strategy 11:05 - Avoid RRIF withdrawal OAS clawback trap 11:50 - Cash outside registered accounts protects line 23400 12:53 - High-interest cash account for retirees 13:10 - Form T1213 OAS Letter of Authority The 2026 OAS clawback claws back 15 cents of Old Age Security for every dollar of net income above $90,997 on line 23400 of your 2024 return, applied to OAS cheques from July 2025 through June 2026. Starting July 2026, the threshold rises to $93,454 using your 2025 return. The recovery tax is federal only, authorized under Income Tax Act section 180.2, and the CRA divides the annual amount by twelve and pulls it from each cheque at source. Line 23400 is the tested figure, not line 23600 - pension splitting via Form T1032 and TFSA-first withdrawal sequencing can drop line 23400 below the threshold and reduce the OAS clawback to zero. If your prior-year income spiked from a one-time event but your current-year income will be lower, Form T1213(OAS) asks the CRA to reduce the deduction at source, typical processing eight to ten weeks. Cash held outside registered accounts does not land on line 23400 when withdrawn, which protects against forced excess RRIF draws on top of the mandatory minimum. Key numbers: OAS clawback threshold: $90,997 (2024 tax year, applies July 2025 to June 2026) OAS clawback threshold: $93,454 (2025 tax year, applies July 2026 to June 2027) Recovery rate: 15 cents per dollar above threshold (Income Tax Act s.180.2) Maximum recovery ceiling age 65 to 74: $148,451 (2024 tax year) Maximum recovery ceiling age 75 plus: $154,196 (2024 tax year) OAS deferral increase: 0.6% per month past age 65, up to 36% at age 70 Form T1213(OAS) processing: 8 to 10 weeks, longer right after tax season Resources: Service Canada - OAS recovery tax overview (read the official threshold and ceiling tables): https://www.canada.ca/en/services/ben... CRA - Form T1213(OAS) request to reduce recovery tax at source (file this when expected current-year income is significantly lower): https://www.canada.ca/en/revenue-agen... CRA - Form T1032 joint election to split pension income (file this with your spouse to allocate up to 50% of eligible pension income): https://www.canada.ca/en/revenue-agen... Service Canada - When to start your OAS pension (deferral mechanics and 0.6% per month math): https://www.canada.ca/en/services/ben... I am not a registered financial advisor or tax professional. This video is general financial education broadcast to a wide audience. It is not tailored to your individual financial situation, needs, or objectives. Consult a qualified professional before making investment or tax decisions. Not tax advice. As an Amazon Associate I earn from qualifying purchases. Contains affiliate links. Purchases through these links earn commission at no extra cost to you. Next → TFSA vs RRSP: the wrapper choice sitting upstream of this whole calculation. Subscribe so you catch it. 🎬   • TFSA vs RRSP: The Banker’s Secret Mistake   #OASClawback #OAS2026 #HudsonBayFinance