The Power of OAS Sharing My Experience with the First Check

When you get your old age security, I'm sorry, like unless you're in a misfortunate position to have no income or a very low income, a lot of it's going to be recovered before you ever see it. I don't like they're going to give it to you and then claw it back at the end of the year at tax time. You're never going to see it. That's what I found out through this process. I really hadn't spent a lot of time even looking at how this works so I thought, well, this would be something that may be interesting for you. Well, well, well, gather around ladies and gentlemen, because today I have a thrilling tale to share with you about the sheer excitement and exhilaration of receiving my very first old age security check. I know you're on the edge of your seats just thinking about it. I mean, who needs bungee jumping or skydiving when you can experience the heart pounding rush of opening an envelope and discovering a modest sum of money from the government, Right? It's a life changing moment, I tell you. Right up there with finding a mismatched pair of socks or discovering a new wrinkle. Stay tuned for the wild ride ahead. Yeah, so today became a reality for me. In may I turned 65 years of age. What I discovered is, okay, the month after that, that's when you start to get your old age security. So that's what I wanted to talk to you about today. Because you get letters, you get different communication from the government. So, well, here I was, I wasn't paying a lot of attention to it, but I knew, hey, it's going to happen in June. But I got a letter back in May and I remember reading a letter and it says you're entitled to $691 of old age security. I was pretty certain at that point I wasn't going to get any supplement. And so I was pretty sure that wasn't coming. And it was pretty much laid out to me clear that it wasn't. So, okay, $691, that's not that bad, eh? When I factor in the tax rate because I knew I was going to be taxed on it, I figured, okay, probably they're going to take withhold at least 40% of that somewhere in that ballpark based on my marginal tax rate, thinking I wasn't putting a lot of thought and hadn't done a lot of research into it. So that's the way to win it. Anyhow, we get along to June and things start to Happen. I got my check. So can you just imagine the excitement? And you get that first check from the government of Canada. I worked hard all my life, and I was a good taxpayer. I still am. I paid a lot of taxes. In fact, I had a period of time when children are old adults, and I was looking at the taxes that I paid in a year when I was back in my previous career, and I would look at the amount, the volume of money that I sent away to help other people in our country and pay my taxes. And it was more than all my children earned. Together, you go, that's a lot of tax that I pay. And if you're a T4 income earner, you've experienced that too. Taxes are a kind of a burden. We know where they come from. We know there's things that need to be done out there. You know, we need health care. We need things like infrastructure, highways and roads. And there's a way to. Some of that stuff is justifiable. But the tax rates have continued to increase. And if you're like me, you felt that burden over time. So here I was, I was excited. I'm going to get that first check. So I want to show you that first check. With all the excitement I had, I got to open up that check and here's what I got. $57. I find $57. I'm not sure I can even take my wife out for dinner now. I was kind of thinking, none of that 691. I would probably get at least half. I say, oh, yeah, probably at least half of it. And then, you know, and I, I knew it was going to be taxed. I knew that old age security was a form of taxable income. You have to be able to account for that at the end of the tax year. I thought, I'll get a chunk of it. I'll. I'll make sure I do my due diligence. I'll be putting. I'm making sure I just spent it. If I hadn't, if they didn't take enough off, but trust me, they took enough off. So out of that 691, I got $57. I also got this letter and it basically just says that this is when my old age security was going to start. This was the monthly voluntary tax deduction. I didn't voluntarily take any tax deduction. I'm taking as much as I could and then, you know, longer I have it, the better. Then I pay tax on it. Then they give me this. So this is the monthly recovery tax for high income seniors. So that's what they calculated they were going to take each month. I got reading a little further and there's all kinds of good information in this letter and I'm not going to share it all with you, but I got part of it. Canada's public pension system old age security pension received with an expected income of more than 81,761 and the 2002 tax year have to pay back all or part of their old age security pension through an automatic monthly recovery. Just a bit surprised. And you know, I got thinking, well what can I share about that? You know, what I've learned over time. If you haven't heard about the process called becoming your own banker, I'm going to encourage you to go and watch watchibc.com that's a video below. There's a link for it. It's a 90 minute kind of information video on what the process call me your own banker is all about and it's based on this book by Arnel Sanash, Coming your own Banker. Now one of the things I've learned about this book is everything you need to know is in the book when it comes to all kinds of things. So I thought I'd just share just a little bit of information with you from that book. What I wanted to talk about out of the book called Becoming youg Own Banker by R. Nelson Nash was page 29. Nelson talks about Willie Sutton's Law. Now this is really about human problems. We have problems as humans. If you don't know that, read the book. But there's things that we do that can be a problem for us. And one of the things that Nelson talked about that impacts us as human beings is a affectionately known as Willie Sutton's Law. Now who is Willie Sutton? Willie Sutton was a bank robber. You know when someone asked him, hey Willie, why are you always robbing banks? Well that's where they keep the money. As Nelson pointed out in his book, wherever wealth is accumulated, someone will try to steal it. So I just wanted to go through a few things in this part of the book just related to what I've experienced with my old age security check. There's lots of history and Nelson went into history and most of this history is American based. I can tell you there's not a lot of differences between how we're taxed in Canada and how they're taxed in the U.S. an interesting piece is that he goes through a lot of history. And what I want to share with you is that as a Result of the above bit of history, you will find yourself engulfed in confessorial taxation. If you're at least effective in producing tax and accumulating wealth, you can count on it. That's Willie Sutton's Law and it's rarely active in his book. Nelson's just got gold. That's right, it's gold. Lots of great information to make us think. And it is all about the way you think. All right, so this is the next page that I wanted you to look at and it's just this part of that same section about Willie Sutton's Law. And this is the part that I highlighted. And again I'm going to encourage you to go back and read the book because that's the best thing you can do. Just going to show different elements of it and different bits of it aligned with what I was thinking when I got my check. Nelson here because he realized that hey, people are going to be have a tendency to get discouraged when they realize that onerous taxation is going to be a problem. Well, Nelson, always thinking about the solution wanted to put that in the same section of his book because it's throughout the book but he speaks to it here. Economic problems are best solved by people freely contracting with one another and with the government limited to the function of enforcing those contracts. And the best way to do that, the tool we use for becoming your own banker is dividend paying whole life insurance. And that's the best tool that's been found to do that process. And it's got some other attributes in one and Nelson's talking about it here, it's been around for over 200 years. First dividend paying whole life insurance policy was 1847. And just like Nelson says here, that's before taxes were even involved in either country. That product was available before there was even income tax. It's private property. That's right. When you own a dividend paying whole life insurance policy, you own it, it's private. And if you have it with a mutual company, it's a private contract between you and and a private company. And the only people who care about others that are dear to them participate in the idea. So that's really what I find. People that care about somebody other than themselves are going to participate in this. And what a great group of people to be associated with in business. That's one of the things I just love about what I do. I help people understand and see that, that they can do something for their family and for others around them. This concept works for things to enable you Reduce the impact of taxation over time because you're going to be tax when you get your old age security. I'm sorry, unless you're in a misfortunate position to have no income or very low income, a lot of it's going to be recovered before you ever see it. Like they're going to give it to you and then claw it back at the end of the year. A tax time. You're never going to see it. That's what I found out through this process. I really hadn't spent a lot of time even looking at how this works. So I thought well, this would be something maybe interesting for you. There's something else. We've got some great resources available to you if you wonder about taxes because it's real. Taxes are real, can't avoid them. Anytime you earn income in our country there's going to be a tax event. Recently we just published a book and it's called keep taxes away from my wealth. This is by my colleagues Henry Wong, Jason Lowe and Richard Canfield. Just a great book about how you can reduce your tax burden. And the other thing that I want you to think about and do is that hey, we got other great videos on our channel. If you go to below now there's one that says pay less Canadian taxes. It's a video that you can watch and just hear what and way you could pay less taxes. I just wanted to spend a bit of time today, you know, making light of the size of the check that I got from my old age security and I hope you found that interesting and maybe give you a chuckle. That's okay, that's great. The other thing I want you to think about is a process called becoming your own banker because it allows you to do things in a different way where you can start making a difference on the amount of taxes that you'll have to pay. I warehouse my money when I have what I have access to, I put it into dividend paying whole life insurance because it grows tax deferred. And I know when I check out a life that death benefit is going to be paid tax free to my beneficiaries. And I don't know how you put a price on that. And I'm still going to be using it up until that point. I'm going to use my system. I'm going to have access to the capital that I've built up in my system. But when I die and I'm going to pass inevitable then greatest exemption in the tax code in Canada is the death benefit. On life insurance. I hope you found this interesting and informative. And I just wanted to leave you with one more thing. Just want you to think like a banker.