How to Get the Most from Your Pension, Benefits, and Tax Relief
For Canadians aged 70 and over, retirement finances can become increasingly complex. Managing multiple income sources, understanding new tax rules, and staying aware of government benefits are key to protecting your savings and maintaining financial stability. This guide outlines practical, verifiable ways to help older adults get the most from their pension income, available benefits, and tax relief opportunities.
🧮 Maximizing Retirement Income Streams
Most Canadians at this stage draw from a combination of federal and personal retirement income sources. The main public programs are the Canada Pension Plan (CPP) and Old Age Security (OAS).
• Canada Pension Plan (CPP): If you delayed CPP until after age 65, your monthly payments increase by 0.7% for each month delayed, up to age 70. After that, no additional increase applies. CPP continues for life and adjusts annually for inflation.
• Old Age Security (OAS): Payments are reviewed quarterly and adjusted for the cost of living. If your income exceeds a certain threshold (CAD $90,997 for 2024), a portion of OAS may be clawed back through the recovery tax. Monitoring income levels can help minimize this reduction.
• Registered Retirement Income Fund (RRIF): By age 71, RRSP accounts must be converted into an RRIF or annuity. Strategic withdrawals can help balance cash flow while avoiding unnecessary tax spikes.
For many seniors, combining these sources with private pensions, annuities, or investment income creates a steady foundation. Working with a qualified financial advisor or tax professional can help coordinate timing and withdrawal strategies that fit personal needs.
🧓 Additional Benefits and Tax Credits Available After Age 70
Beyond core pensions, Canada offers several age-related programs and credits that can significantly improve after-tax income.
• Guaranteed Income Supplement (GIS): Low- to modest-income seniors receiving OAS may qualify for GIS, which provides monthly, non-taxable support. The amount depends on marital status and other income.
• Age Amount Tax Credit: Canadians aged 65 and older can claim a federal non-refundable tax credit (up to CAD $8,396 for 2024). The credit gradually reduces as income increases but remains an important offset for many retirees.
• Pension Income Amount: Individuals receiving eligible pension income—such as from RRIFs or annuities—can claim up to CAD $2,000 annually as a tax credit. Couples can also use pension income splitting to reduce overall tax liability.
• Medical Expense Tax Credit: Seniors often face higher healthcare costs. This credit allows eligible medical expenses, including certain home care and mobility devices, to be deducted beyond a set income threshold.
• Provincial Supplements: Several provinces offer additional benefits, such as the Ontario Guaranteed Annual Income System (GAINS) or BC Senior’s Supplement, which top up federal support programs.
These benefits are typically applied for through Service Canada or provincial agencies and can change annually based on budget updates and income testing.
🧾 Tax Tips for Canadians Over 70
Tax planning after age 70 often focuses on keeping taxable income within moderate limits while ensuring sufficient cash flow. A few practical strategies include:
• Coordinate withdrawals: Plan RRIF withdrawals and investment redemptions to avoid pushing income into higher tax brackets or triggering OAS clawbacks.
• Pension income splitting: Couples can allocate up to 50% of eligible pension income to a spouse for tax purposes, potentially reducing total taxes owed.
• Charitable donations: Donations to registered Canadian charities qualify for tax credits that can lower federal and provincial tax bills.
• Claim all available credits: Beyond the age and pension income credits, consider claiming caregiver, disability, and medical expense credits where eligible.
• Track investment income: Interest, dividends, and capital gains are taxed differently. Adjusting portfolios toward tax-efficient holdings may improve after-tax returns.
Filing taxes accurately and on time ensures continued access to benefits and prevents delays in OAS or GIS payments.
⚖️ Keeping Perspective
Financial management after 70 is not only about maximizing income—it’s about maintaining predictability and peace of mind. Reviewing accounts annually, monitoring government program updates, and understanding tax obligations can help seniors stay confident about their financial future.
While individual situations vary, focusing on three core areas—steady income, available credits, and smart tax planning—can make a meaningful difference in how far retirement savings go in later life.