GMFSI Retirement Income Checkpoint • October 2026
OAS payments increased for October–December 2026. But an OAS clawback review still matters: a higher payment does not tell you how much retirement income you will keep after tax.
Before making additional RRIF withdrawals or selling investments before year-end, look at the combined effect on your income, taxes and government benefits. The useful question is how to meet your spending needs while keeping your overall retirement plan sustainable.
What changed in October 2026?
Ages 65–74
Maximum standard monthly OAS pension for October–December 2026.
Age 75 and over
Maximum standard monthly OAS pension for October–December 2026.
Service Canada reports a 1.4% quarterly increase. These are maximum standard amounts before tax and any recovery-tax deductions; your payment depends on your circumstances. A partial pension, deferral or other factors can change the amount you receive.
OAS clawback: keep the income year separate from the payment period
The OAS recovery tax, commonly called the clawback, can apply when income exceeds the annual threshold. For Canadian residents, the calculation generally uses net income before adjustments, reported on line 23400 of the tax return.
| Income year | Recovery begins above | Related monthly withholding period |
|---|---|---|
| 2025 | $93,454 | July 2026–June 2027 |
| 2026 | $95,323 | July 2027–June 2028 |
Your 2026 income determines the recovery-tax calculation on your 2026 return. It can also affect estimated deductions from future OAS payments beginning in July 2027. Those deductions are credited through the tax-return process; they are not a second clawback charged on the same income.
A simple illustration
Suppose an OAS recipient has relevant 2026 income of $100,000. The amount above the $95,323 threshold is $4,677. At the 15% recovery rate, the illustrative recovery is $701.55, subject to the applicable calculation and the amount of OAS received.
This recovery is additional to ordinary income tax. It is not a flat 15% tax on all your income. An extra $1,000 of relevant income above the threshold can add $150 of recovery tax until OAS has been fully recovered.
Which income deserves a closer look?
Registered withdrawals and pensions
RRSP and RRIF withdrawals, employer pensions, CPP and OAS can contribute to taxable income. Review the remaining RRIF minimum and any optional withdrawals together.
Investment and other income
Interest, taxable dividends, taxable capital gains, employment and rental income may affect the calculation. The taxable dividend gross-up can make reported income larger than the cash dividend received.
A TFSA withdrawal generally does not enter taxable income or reduce OAS or GIS. That can make it a useful source of flexibility, although the right account to draw from depends on the whole plan.
Five checks before December 31
- Estimate full-year income. Include pensions, withdrawals already made and expected investment income.
- Confirm remaining RRIF withdrawals. Required minimums must be satisfied; optional withdrawals deserve a separate review.
- Review planned investment sales. Estimate taxable gains and available losses with your accountant before trading.
- Compare withdrawal sources. Consider registered accounts, TFSA savings and available cash alongside future taxes and liquidity.
- Check household planning opportunities. Eligible pension-income splitting may help some couples, but eligibility and the overall result must be assessed.
Preserving OAS is one part of the decision
Do not postpone a necessary withdrawal or retain an unsuitable investment solely to avoid recovery tax. A plan that minimizes this year's clawback can still create higher future taxes, insufficient cash flow or excessive investment risk. Compare the total after-tax result over time.
Lower-income retirees: GIS needs its own review
For October–December 2026, the maximum GIS for a single, widowed or divorced OAS recipient is $1,138.90 per month. GIS is income-tested using different rules from the OAS clawback. An additional registered withdrawal may reduce GIS even when income is far below the OAS recovery threshold. Check benefit effects before withdrawing.
Questions clients often ask
Do I need to apply for the quarterly increase?
Existing recipients generally receive the adjustment automatically. Check your statement if the amount is unexpected.
Does withholding tax on a RRIF withdrawal settle the OAS clawback?
Withholding is a tax prepayment. The final income-tax and benefit-repayment amounts are determined through your return. A withheld amount does not remove the withdrawal from income.
What if my income has fallen since last year?
You may be able to ask CRA to reduce OAS recovery-tax deductions at source using Form T1213OAS. Review the conditions and supporting information first; this adjusts withholding, rather than eliminating any final tax owed.
Could your year-end withdrawals affect your OAS?
A GMFSI retirement-income review can help coordinate cash flow, account withdrawals and benefit considerations before decisions are made.
Request a 15-Minute Clarity SessionVisit GMFSI Canada on YouTubeMadhu Shukla, CFP®, EPC
Green Mountain Financial Services Inc.
PROTECT • GROW • PRESERVE
General information only, not individualized investment, tax or legal advice. Benefit rates and thresholds can change. Confirm your eligibility and calculations with Service Canada, CRA and your qualified tax professional.
Official sources
- Service Canada: OAS payment amounts — updated September 29, 2026; October–December 2026 rates.
- Service Canada: OAS recovery-tax thresholds and income years.
- Service Canada: repayment for Canadian residents.
- CRA: Form T1213OAS.
Continue Learning With GMFSI on YouTube
Watch practical Canadian videos covering retirement income, investments, insurance, estate planning and workplace benefits.
Visit & Subscribe to GMFSI on YouTube
