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Diwali: The Festival of Lights and Togetherness

Diwali, also known as Deepavali, is one of the most celebrated festivals in India and across the world. Symbolizing the triumph of light over darkness and good over evil, it brings families, friends, and communities together in a spirit of joy and renewal. The celebrations usually begin with cleaning and decorating homes, often with colorful rangoli patterns and rows of glowing diyas (oil lamps). Fireworks light up the night sky, while the aroma of festive sweets and savory dishes fills the air. People exchange gifts and sweets as a gesture of love and goodwill, strengthening bonds within families and neighborhoods. Beyond its vibrant traditions, Diwali also carries deep cultural and spiritual meaning. For many, it marks the return of Lord Rama to Ayodhya after defeating Ravana, while others honor Goddess Lakshmi, the bringer of prosperity. Regardless of the story, the essence remains the same: spreading light, hope, and positivity. In today’s world, Diwali has also become a global...
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Understanding the OAS Clawback: Impact and Costs

 

The Old Age Security (OAS) clawback is a critical aspect of Canada’s retirement system. Let’s delve into the details:

What Is the OAS Clawback?

  • Threshold: Seniors who receive OAS payments may need to pay back a portion if their annual income exceeds a certain amount. This threshold is indexed annually and currently stands at $86,912 for 2023 (estimated to be $90,997 for 2024).

  • 15% Tax: For every taxable dollar earned above this threshold, a 15% clawback tax is applied to the OAS benefit. Essentially, seniors still receive OAS income, but it’s reduced by this withholding tax.

Who Is Affected?

  • High Earners: Previously high-income earners applying for OAS may face immediate clawbacks based on prior tax returns. The timing of pension receipt determines which year’s income is considered.

  • Specific Income Levels:

    • 65-74 Years Old: If your income exceeds $142,609, you won’t receive OAS.
    • 75 and Older: For those over 75, the threshold is $148,179.

Costs and Considerations

  • Annualized Growth: Canada’s economy surged in Q4 2023, but the OAS clawback remains a concern for retirees. Balancing growth and income thresholds is crucial.

  • Minimizing Clawback: Strategies exist to minimize the clawback. For instance, managing investment income and optimizing retirement accounts can help.

Remember, while the OAS clawback affects many, it’s essential to consult a professional for personalized advice. 


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