Canadian & US citizen planning to retire

[JeanCyr]

I was born in Canada in 1953 and have retained my Canadian Citizenship since moving to the US in 1997 and obtaining US citizenship 2007. I meet full pension requirements for both countries separately.

I have a couple of options under consideration:

Stay in the US despite the shaky outlook for Medicare, furthermore I don't want to wait for Medicare eligibility to retire.

Move back to Canada and take advantage to the universal medical coverage.

The second item I need to understand is the amount of social security and/or CPP I'd be entitled to. I've heard that even though I'll meet the full pension requirements for both countries at retirement age, I might not receive that much due to an agreement on social security between Canada and the United States.

Any advice, suggestions, of references to experts I might consult?

 

[kumquat]

Welcome Jean,

Good news, you are probably eligible for Canadian OAS reguardless of where you chose to retire, see: Overview of the Old Age Security Program

If you worked in Canada and the US CPP/SS in some combination probably applies. See: Infosheet on the Agreement on Social Security between Canada and United States

If you move back to Canada you will probably be in limbo healthcare wise for 3 - 6 months, no links.

Good luck

 

[nun]

I was born in Canada in 1953 and have retained my Canadian Citizenship since moving to the US in 1997 and obtaining US citizenship 2007. I meet full pension requirements for both countries separately.

I have a couple of options under consideration:

Stay in the US despite the shaky outlook for Medicare, furthermore I don't want to wait for Medicare eligibility to retire.

Move back to Canada and take advantage to the universal medical coverage.

The second item I need to understand is the amount of social security and/or CPP I'd be entitled to. I've heard that even though I'll meet the full pension requirements for both countries at retirement age, I might not receive that much due to an agreement on social security between Canada and the United States.

Any advice, suggestions, of references to experts I might consult?

I'm in a similar situation as I qualify for both US and UK SS and that I'm probably going to retire back to the UK so I can use the NHS rather than having to deal with buying health insurance before 65 and then Medicare afterwards.

If you have less than 30 years of US SS and your Canadian pension is from earnings that were not subject to FICA the SSA will reduce your US SS because of the Windfall Elimination Provision.

 

[nikon_d40]

Jean, I am in the same situation. I also qualify for both CPP and SS and we are planning to move back to Canada once early retired (hopefully early 2013). Nun is correct that there is a provision in the SS called WEP which will reduce your SS payout a bit, but what you also have in Canada is the OAS about $600 per month (maybe even GIS if your income fall below a certain amount). These benefits easily more than your WEP. Furthermore, I also agree with Nun on the medicare issue. There is so much uncertainties in the US about future coverage / cost.

 

[nun]

Jean, I am in the same situation. I also qualify for both CPP and SS and we are planning to move back to Canada once early retired (hopefully early 2013). Nun is correct that there is a provision in the SS called WEP which will reduce your SS payout a bit, but what you also have in Canada is the OAS about $600 per month (maybe even GIS if your income fall below a certain amount). These benefits easily more than your WEP. Furthermore, I also agree with Nun on the medicare issue. There is so much uncertainties in the US about future coverage / cost.

Yes I believe that CPP is considered for WEP, but that OAS isn't because it isn't paid for out of non-SS wages. If you can make voluntary CPP contributions then those would not count towards WEP either, the UK allows voluntary contributions into the state pension for UK expats, but I don't know if Canada does too. Right now the maximum your US SS can ever be reduced by WEP is $385. However, if the same general principles apply as with the UK, the OAS benefit will be taxable by the US when paid to a US citizen. To work out how you'll be taxed on US SS and Canadian CPP you'll need to reference the US/Canadian tax treaty. But usually US SS is only taxable in the country of residence when paid to a US citizen living overseas.

 

[JeanCyr]

The UK allows voluntary contributions into the state pension for UK expats, but I don't know if Canada does too.

As far as I know Canada doesn't allow voluntary contributions. Regardless, I left Canada with many years of relatively high income so I'm not sure how making further contributions would enhance my payout?