How can I avoid the OAS clawback?

Keep your net income below the recovery-tax threshold by drawing tax-free TFSA income, splitting pension income with a lower-income spouse, melting down your RRSP before 65, and timing CPP and OAS. Every dollar of net income above the threshold costs 15 cents of OAS.

What income can be split with a spouse in retirement?

Canadians 65+ can split up to 50% of eligible pension income — including RRIF withdrawals, defined-benefit pension income and annuity payments — with a lower-income spouse to reduce combined household tax.

Seven ways to cut your tax bill in retirement

Tax is often a retiree's single biggest expense — and unlike markets, it's something you can actually control. Here are seven legal ways Canadians keep more of their money.

1. Split pension income with your spouse

At 65+, you can move up to 50% of eligible pension income (RRIF withdrawals, DB pension, annuities) to a lower-income spouse, flattening your combined bill and often saving thousands a year.

2. Stay under the OAS clawback line

Every dollar of net income above the threshold costs you 15 cents of OAS. Managing which accounts you draw from can keep you below it — see the OAS clawback calculator.

3. Draw tax-free TFSA income strategically

TFSA withdrawals aren't income, so they don't raise your tax rate or trigger clawbacks. Using the TFSA to top up spending in high-income years is one of the cleanest tools available.

4. Melt down your RRSP early

Drawing RRSP income in your low-income 60s — before RRIF minimums and CPP/OAS begin — spreads the tax over more years and shrinks the forced withdrawals later. More on drawdown order.

5. Delay CPP and OAS

A larger, indexed benefit later can be more tax-efficient than a bigger portfolio throwing off taxable income — and it's longevity insurance too.

6. Use the pension income tax credit

Once you have eligible pension income, the federal pension income amount shelters the first $2,000 — a small but easy win, sometimes worth converting a little RRSP to a RRIF at 65 to claim it.

7. Mind your province

Provincial brackets and credits vary widely. The same income is taxed differently in Nova Scotia than in Alberta — model your plan with your province's rates, not a national average.

None of these require anything exotic — just a plan that looks at the whole picture. Model your own numbers and watch the tax line move.