Crossborder Retirement Pensions

Many Canadian and American expatriates we encounter need guidance with respect to their government pension planning. Commonly, they will have worked in both countries and have accumulated both Canada Pension Plan (CPP) and US Social Security (SS) pension credits. The question then becomes, “which pension do I apply for when I retire?” and “how much am I entitled to receive?” While everyone has their own unique situation, here we provide guidelines and resources that might help expatriates understand cross-border retirement pensions better.

We always recommend discussing your personal situation with a Pacifica cross-border portfolio manager or an advanced cross-border planner to help you in your retirement planning. In addition, we do recommend calling the specific government office as well that relates to your pension, in order to receive specific information and guidance that you can incorporate.

Key points to remember:

• Canada Pension Plan (CPP): you will generally receive benefits if you have contributed to this plan.
• Social Security (SS): you typically need 10 years of eligible earnings (or 40 credits) to qualify.
• If you have paid into both CPP and SS, or if you don’t have 40 SS credits, the Totalization Agreement may give you a combined credit towards a potentially greater retirement pension.
• If you’ve contributed to Social Security for between 10 to 30 years, the Windfall Elimination Provision (WEP) may claw back some of your CPP or SS, depending on where you reside.
• If you have paid into both, please ensure you have accounts set up with myCRA, Service Canada, and mySocialSecurity to ensure access to your latest benefit estimates. It will be much easier to estimate your combined pensions with these details in hand.

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