By Fraser Institute ——Bio and Archives--April 21, 2022
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- Reduction in government benefits: Typically, seniors who continue to work after age 65 will incur “clawbacks” (essentially, benefit reductions) for the Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement.
- Higher effective tax rates: Working Canadians age 65 and older who earn approximately $39,000 or more (2021) will essentially incur a clawback rate of 15 per cent on their income due to a federal tax credit.
- Mandatory withdrawals of RRSPs: When a person turns 71, their RRSPs must be converted into a Registered Retirement Income Fund (RRIF) or annuity, and they must begin withdrawing benefits. If the person continues to work—while receiving these benefits—they may move into a higher tax bracket.
- Reduction of government pension benefits: Some government pension programs are based on income, with clawback rates that reduce benefits if recipients earn income from working.
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit fraserinstitute.org.
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