#FLM2017 What You Need to Know About Old Age Security and DebtNov 13, 2017
Retirement can be expensive. And while many retirement aged Canadians are optimistic about their financial futures, the amount of debt they’re carrying can be alarming. Senior household debt is over $15,000, on average. With more modest incomes, seniors may need more help with their debt.
Old Age Security (OAS) can increase your income slightly, but if your costs and debts are high, you might need to revisit your retirement budget to make sure you’re not heading for financial trouble.
- There are eligibility requirements for receiving OAS. You must have been a Canadian resident for at least 10 consecutive years after the age of 18.
- The amount you’ll get depends on how many years you’ve been a Canadian resident.
- You qualify to receive payments once you reach the age of 65.
- You’re usually automatically enrolled in OAS. But, if you don’t receive a letter confirming enrolment after your 64th birthday, you may have been missed. It’s important to contact Service Canada and get enrolled. If you don’t, you’ll only be eligible to receive up to one full year of retroactive payments. This could result in lost money that you may need to avoid debt in retirement.
- The maximum payment, as of September of 2017, is just over $583 a month.
- If you’re a low income senior, you may be able to get topped off.
If you’re a high income senior, your payments will likely be clawed back, resulting in a repayment responsibility.
Unexpected events that result in additional costs, modest pensions, medical expenses, or the costs of supporting family can have a big impact on your retirement budget. The OAS is a supplement, but only a small one. Make sure you plan your retirement budget carefully before heading into retirement to avoid debt.