Retirement can be scary, but the Canadian Revenue Agency (CRA) has got your back. This retirement benefit has nothing to do with your employment status or your contributions made from your work income, as in the case of the Canada Pension Plan (CPP). If you are 65 years old and have lived in Canada for at least 20 years after turning 18, you are eligible to get this taxable payout. This CRA benefit is the Old Age Security (OAS) pension, and the payout can be as high as $734.95 per month, about $8,820 annually, for individuals aged 65–74.
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How the Old Age Security clawback works
The OAS is meant for low and middle-income earners. This means it has an incremental income threshold, and if your income is above this threshold, the CRA will claw back your OAS.
The CRA calculates your OAS based on your previous year’s income. It means your 2025 OAS clawback will depend on your 2024 taxable income, which includes capital gains, dividends, salary, and Registered Retirement Income Fund (RRIF) withdrawals.
The 2024 minimum income recovery threshold was $90,997, and the maximum was $148,451. What does this mean?
If your 2024 taxable income was above $90,997, the CRA will claw back 15% of the surplus income from your OAS as recovery tax. The OAS amount you receive in 2025 would be after deducting the clawback amount.
Suppose Jacob’s 2024 taxable income was $120,000. His surplus income is $29,003, from which the CRA will claw $4,350.45 (15% of $29,003) and give him $4,469.55 in OAS, which comes to $372.41 per month.
| Particulars | Amount | Calculation |
| Jabob’s 2024 Income | $120,000 | |
| OAS minimum income threshold | $90,997 | |
| Surplus amount | $29,003 | $120,000-$90,997 |
| OAS Clawback amount | $4,350.45 | 15% X $29,003 |
| OAS paid in 2025 | $4,469.55 | $8,820-$4,350.45 |
| OAS per month | $372.46 | $3,469.55 / 12 months |
The income threshold that triggers OAS clawback in 2025
If you are facing a weak income year in 2025, the OAS clawback could hurt even more. Thus, it is important to plan your retirement benefits and know the 2025 income threshold that can trigger OAS clawback.
The 2025 minimum income threshold for OAS is $93,454, and the maximum is $151,668, which could be adjusted later.
You have to plan your investment income, RRIF withdrawals, CPP payout, and tax deductions in a way that keeps your 2025 taxable income below or closer to $93,454 to get maximum OAS.
Tips to get maximum OAS
RRSP contribution: If your 2025 taxable income is likely to be way above $93,454, you could delay your Registered Retirement Savings Plan (RRSP) withdrawals and instead contribute another year. This way, you can deduct the RRSP contribution to reduce your taxable income and get maximum OAS.
CPP payout: You can delay your CPP payout by a year to reduce your taxable income. In this process, you can increase your CPP payout by 8.4%, 0.7% for every month of delay from age 65.
TFSA dividends: The CRA calculates dividend income as 138% of the actual dividend amount when determining income for the OAS threshold. If you earn $1,000 in dividend income, the OAS will count it as $1,380. As you near retirement, consider investing in dividend stocks through the Tax-Free Savings Account (TFSA).
Choosing the right account for the right investment can help you maximize retirement benefits.
Some good stocks for extended RRSP contributions
While you maximize your OAS, you could consider investing your RRSP contribution in Telus Corporation (TSX: T). With not much time before you take RRIF withdrawal, you might want to maximize your payouts, and Telus’s 7.6% dividend yield can give you high payouts and even grow them with inflation.
The telco has slowed its dividend growth rate from 7—10% in 2025 to 3—8% in 2026, but even the reduced growth rate is good to fight inflation. The slowdown in dividend growth is compensated for by a higher yield. If you are worried that Telus could announce dividend cuts like its peer BCE, rest assured. Telus is focusing on reducing its debt and capital expenditure. T stock has improved its dividend payout ratio from 81% in 2024 to 76% in the first quarter of 2025.
A $10,000 investment can earn you $749.83 in annual TFSA dividends, which is closer to one month of maximum OAS. Moreover, this income will not claw back your OAS.
