Free Canadian Retirement Calculator That Models OAS Clawback: What to Look For

A free Canadian retirement calculator that models the OAS clawback has to project your total taxable income year by year and compare it to the OAS recovery threshold. It then shows the 15% repayment on every dollar above that line. Most simple calculators skip this step and show OAS as a flat amount. Look for a tool that tracks RRIF withdrawals, CPP, pensions and investment income together, so you can see which years cross the threshold and roughly how much OAS you would give back.

That is the short answer. The rest of this article covers how the clawback works, what a calculator needs in order to model it properly, where free tools tend to fall short, and a worked example on a $1.2 million portfolio so you can follow the math.

How the OAS clawback actually works

Old Age Security is a monthly federal pension paid to most Canadians from age 65. The "clawback" is officially called the OAS recovery tax. Once your net world income passes a set threshold, you repay part of your OAS.

There are three numbers to know:

• The threshold. The CRA set the OAS recovery threshold at $93,454 for the 2025 income year, and it goes up with inflation each year. You can check the current figure on the Government of Canada's Old Age Security page.
• The rate. You repay 15 cents of OAS for every dollar of net income above the threshold.
• The ceiling. At around $150,000 of net income, the 15% repayment cancels out the full OAS pension and you receive nothing. The exact ceiling depends on your age and the payment period, because pensioners aged 75 and over receive 10% more OAS, as Service Canada confirms.

Timing trips up a lot of people. The recovery tax is calculated on your annual tax return. The CRA then holds back part of your monthly OAS from July of the next year through the following June, based on the income you reported. So a big income year usually shows up as smaller OAS cheques the year after.

Why most free calculators miss it

Many free retirement calculators are built around one question: will my money last? They add up savings, apply a growth rate, subtract spending, and treat government benefits as fixed income. That is a fair simplification for a first look, but it misses the clawback in three ways.

They don't track net income each year. The clawback depends on your total taxable income, not on your portfolio size. A calculator that never builds an annual income figure can't tell when you cross the threshold.

They ignore the RRIF schedule. After you convert an RRSP to a RRIF, a minimum withdrawal is required every year. According to the CRA's prescribed factors, the minimum is 5.28% of the account value at age 71 and rises each year after that. Those required withdrawals often push income into the clawback range, whether or not you need the money.

They treat all withdrawals the same. A dollar from a TFSA, a dollar from a RRIF and a dollar of grossed-up dividends all affect the clawback differently. A tool that just counts "withdrawals" can't model OAS recovery properly.

The federal Canadian Retirement Income Calculator is a good free place to estimate your CPP and OAS. It is designed to estimate public pension income, though, not to project your taxes and clawback year by year.

What a calculator needs to model the clawback properly

If you are comparing free tools, including the free retirement planning calculators on this site, here is a practical checklist.

1. A year-by-year income projection

The tool should show your income for every year of retirement, not one average figure. The clawback is an annual calculation, so you need annual numbers.

2. Separate treatment of each income source

At a minimum, the calculator should split out:

• CPP and OAS
• Workplace pension income
• RRSP and RRIF withdrawals
• Non-registered investment income (interest, dividends and capital gains)
• TFSA withdrawals, which should not count toward net income

3. Dividend gross-up

Canadian eligible dividends are "grossed up" by 38% on your tax return before the dividend tax credit is applied. Your income for clawback purposes is therefore higher than the cash you actually received. A calculator that skips the gross-up will understate the clawback for anyone holding dividend-paying investments in a taxable account.

4. Pension income splitting for couples

Spouses and common-law partners can split up to 50% of eligible pension income on their tax returns, which can move one person below the threshold. A calculator built for couples should let you model this.

5. Inflation-indexed thresholds

Because the threshold rises every year, a projection that holds it fixed will overstate the clawback in later years. Good tools index it.

6. Timing of CPP and OAS

Delaying OAS past 65 increases it by 0.6% per month, up to 36% at age 70, according to the Government of Canada. Delaying CPP also raises it. Both decisions change your income in each year, and so they change your clawback exposure. Our CPP timing guide explains those trade-offs in more depth.

A worked example: $1.2 million and a pension

Here is a hypothetical example to show the math. The figures are rounded and simplified for illustration only.

The situation: A single retiree, age 72, living in London, Ontario.

• RRIF balance: $900,000
• TFSA balance: $150,000
• Non-registered account: $150,000
• Total portfolio: $1,200,000
• Workplace defined-benefit pension: $40,000 a year
• CPP: $14,000 a year
• OAS: approximately $8,900 a year

Step 1: Find the RRIF minimum. The CRA's minimum withdrawal factor at age 72 is 5.40%. $900,000 × 5.40% = $48,600

Step 2: Add up net income. $40,000 (pension) + $14,000 (CPP) + $8,900 (OAS) + $48,600 (RRIF) = $111,500

The TFSA isn't included because TFSA withdrawals aren't taxable. For simplicity, we'll assume the non-registered account produces very little taxable income this year.

Step 3: Compare to the threshold. Using the 2025 threshold of $93,454: $111,500 − $93,454 = $18,046 above the line

Step 4: Apply the 15% recovery rate. $18,046 × 15% = about $2,707

So in this example, roughly $2,707 of the $8,900 OAS pension would be repaid. That's close to 30% of the benefit, and it comes on top of regular federal and Ontario income tax on the same dollars.

Step 5: See what changes the picture. This is where a calculator that models the clawback earns its keep. Change one input at a time and watch the result:

• Earlier RRSP withdrawals. If some RRSP money had been drawn down in the years between retirement and age 71, the RRIF balance at 72 would be smaller, and so would the required minimum. This is the idea behind an RRSP meltdown, covered in our RRSP meltdown guide.
• More spending from the TFSA. Spending from the TFSA doesn't raise net income, though the RRIF minimum still has to come out.
• Market growth. If the RRIF grows faster than the withdrawals, the minimum gets larger every year and the clawback can grow along with it.

None of these is automatically the right choice. Each has trade-offs involving tax today versus tax later, estate considerations and how long the money needs to last. The point of the calculator is to make those trade-offs visible.

The clawback is often a "later" problem

Many people check their income at 65, see that they're comfortably under the threshold, and conclude the clawback doesn't apply to them. Then RRIF minimums start, the RRIF factor rises a little every year, CPP and pensions are indexed upward, and at some point in their 70s income crosses the line.

The reverse can also happen. Someone retires at 60 with a large RRSP and almost no other income, then draws heavily in their 60s and is well under the threshold by 75. A calculator that only looks at one year can't show either pattern.

"The clawback is rarely about one year. It's about the shape of your income over twenty or thirty years, and you can only see that shape when every account is on the same page," says Marc Pineault, retirement planner in London, Ontario.

This is the main reason year-by-year modelling matters. The question isn't only "am I over the threshold?" It's "in which years am I over, by how much, and what drives it?"

Other income that can trigger the clawback

People are sometimes surprised by what counts toward net income for OAS purposes. A good calculator should account for:

• Taxable capital gains from selling investments or a cottage, which can produce one large spike year
• Grossed-up dividends, including dividends paid out of a private corporation (business owners can read more in our salary vs dividends guide)
• Rental income after expenses
• Foreign pensions and income, since the test uses net world income
• Final-year deemed income for anyone receiving a large lump sum

One-time spikes deserve special attention. Because the threshold applies to a single year, a large capital gain can cause a full or near-full clawback for that year even if every other year is well below the line.

How to use a free calculator well

Free tools are worth using, and a few habits make them more useful:

1. Enter real account balances by type. Don't lump everything into "savings." The RRSP, TFSA and non-registered split matters most.
2. Check what the tool assumes for taxes. If it doesn't mention the OAS recovery tax, assume it isn't modelling it.
3. Run more than one scenario. Compare CPP and OAS at 65 against later start dates, and early RRSP draws against waiting until 71.
4. Look at the later years, not just the first. Scroll to ages 75, 80 and 85. That's often where the clawback shows up.
5. Treat results as estimates. Growth rates, inflation and tax rules all change. The Bank of Canada's inflation target of 2% is a reasonable long-run planning assumption, but actual inflation varies from year to year.

For more on how the RRIF schedule and the clawback interact, our OAS clawback strategy guide and RRIF withdrawal strategy guide go into more detail.

The bottom line

A free calculator can show the OAS clawback, but only if it builds a year-by-year net income projection, handles each account type separately, includes the dividend gross-up and indexes the threshold. Simple "will my money last" calculators usually leave the clawback out, which can make retirement income in your 70s look higher than it will be.

Marc Pineault works with retirees and pre-retirees in London, Ontario and across the province. He finds that once people see their income laid out year by year, the clawback stops being a vague worry. It becomes a specific number in specific years, and they can understand it and plan around it calmly.

---

This article is for educational purposes only and does not constitute personalized financial advice. Please consult a qualified professional before making any financial decisions.