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So, what happens to my OAS NOW??

on Fri, 06/01/2012 - 15:22

I was chatting with one of my clients who is now looking to retire in a few months (initially she thinks she would work for another 2 years more). So, I asked her to gather all her RRSP and group pension information, together with her CPP numbers so that we know exactly what to do and how to do the withdrawals after her retirement. 

 

She called CRA and asked for update information on her CPP (she did get her CPP Statement of Contributions, but she wants to see if there is any changes because of the budget… Readers who would like to know more details on their own CPP, please follow the instructions on my other post What is my CPP going to look like?) Technically, CPP based on the amount you earned over the years, how much you contributed into the CPP and the number of years you have been working in Canada. And then she was told that her OAS would change… that she won't get what she is entitled to… that scared her a lot and she had to call me right away before our meeting.

 

I feel sorry for my client that she had got the wrong information, because the new budget does not affect anyone retiring in the next few years at all. After the budget, a lot of people were confused what is going on, how are things going to look and so on, regardless the Government of Canada did put up a FAQ web page for that. Majority of people know that the OAS eligible age will be pushed to 67. However, at the same time, people are not quite sure how is that change going to in place. 

 

For those who are confused, there is a phase-in period: 

- Anyone born on or before March 1958 does not need to be worried because the budget does not affect you. 

- People who were born between April 1958 to Jan 1962 are the ones in the transitional period (contact me for the details on the transition if you are interested). 

- And for those who were born on or after Feb 1962, your OAS will pushed to 67 without exception.

 

**For the year of 2012, senoirs who have more than $69,562 annual income will start to experience OAS clawback, until whose income is over $112,772, the entire OAS is withheld.

 

I hope this information will help those who are worried and clear up the fear.

 

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