If you worked in both the U.S. and Canada, there is a good chance that you will have both U.S. social security and a Canadian pension. Unfortunately, this brings an added wrinkle regarding when you should turn on each benefit. This article discusses how the Windfall Elimination Provision (WEP) may reduce your social security benefit. Having a social security benefit that is subject to WEP, makes social security planning even more difficult. Do you draw your CPP early, which reduces how much your social security will be negatively impacted? Or, do you draw social security early and wait to turn on CPP? This strategy allows you to draw social security for years before WEP impacts your benefit. This article discusses some of the timing strategies that you have when you have both social security and the Canadian Pension Plan (CPP).
Starting Social Security Early and Delaying CPP
You can start drawing your social security as early as age 62 and you can delay and grow your CPP until age 70. The biggest benefit of this strategy is the ability to draw social security for up to 8 years before you start collecting your CPP, therefore not having any WEP reduction for these 8 years. One of the important things to remember about WEP is that your social security benefit is not reduced until you turn on your CPP. Therefore, starting social security early allows you to collect an un-impacted benefit while allowing your CPP to grow until age 70.
The biggest issue with this strategy is that once you do turn on your CPP, WEP is going to have a major impact on your social security benefit. This is because if you have less than 20 years of work experience in the U.S., your social security will be reduced by half of your CPP or up to $512 in 2022, whichever is less. A $512 reduction in your social security benefit will be significant, especially given that you started social security early and already have a reduced benefit.
Delaying Social Security and Starting CPP Early
You can start CPP as early as age 60 and you can delay and grow your social security benefit until age 70. The benefit of this strategy is that you are starting CPP early which reduces your CPP benefit and therefore reduces the amount in which your social security will be reduced by WEP. Also, you are getting a higher social security benefit, so the WEP reduction compared to total social security benefit is minimal.
The hardest part about delaying social security this long and taking a minimal CPP is surviving those first few years of retirement with very little fixed income. Although from age 70 and beyond you will have a high amount of social security coming in, you will need to rely on high retirement account distributions until you turn on social security.
Recently, I had a client who had a private Canadian pension as well as CPP. He had an incentive to turn on his Canadian private pension early as it stops growing after a certain age. Also, because of the higher private Canadian pension, as soon as he turned on his U.S. social security, it would be reduced by $512 because of WEP. Therefore, we determined he would be better turning on his Canadian private pension and CPP early and wait to draw his social security benefit until age 70.
Delaying Both Social Security and CPP
In theory, this strategy seems to make the most sense because delaying both social security and CPP allows both benefits to grow, and allows you to collect a higher overall benefit. Typically, the longer you wait to draw social security and CPP, the more that you will earn over your lifetime, as long as you live past around age 80. Certainly, age 80 is not guaranteed, but becoming more and more likely as people are living longer. Also, if you are married, your spouse will receive your higher benefit for the rest of their life, if you pass first. Therefore, delaying social security provides a kind of insurance policy for your spouse.
Still, the math doesn’t always make sense to delay both benefits. For example, your social security will increase each year that you delay your benefit but your CPP will also increase. This may seem good, but this also means that your WEP reduction will also potentially increase as you delay CPP. You could be in a situation in which your WEP reduction is growing by the same amount as your social security benefit each year, essentially eliminating the benefit of delaying. If you are in that situation, you may decide to start either your CPP or social security benefit or continue to delay until social security starts growing by more than the WEP is reducing it.
Start Both Social Security and CPP Immediately
Starting both of your benefits as soon as possible has its pros and cons. The benefit is that you are starting your CPP early which reduces how much your social security will be impacted by WEP. Therefore, the lower social security benefit you will receive by starting early won’t have as big of an impact. Also, you are collecting this fixed income in your 60s, when you may need it most, and are spending more money.
The negative is that this strategy will almost always provide the least amount of income over your life unless you pass away in your early to mid-70s. Yes, your social security will have a minimal WEP reduction, but you are also starting with a lower benefit. I’m not saying that you shouldn’t turn on both benefits early, but the tradeoff for starting your income early is a lower annual benefit over a longer period of time.
In Conclusion
Deciding when to start social security is difficult enough, throw in your CPP benefit, and the timing strategy seems impossible. There is no right answer when to start your CPP and social security benefit. The decision needs to be based on the size of your social security benefit, CPP, the length that you worked in the U.S. and Canada, and if you have any other private pension plans. Having this many options may seem daunting, but you should look at it as an opportunity. Having this many options allows you to customize your retirement income to best suit your retirement needs.
Do you have a CPP and social security and need help determining when to start both benefits? RetireMitten Financial specializes in helping families navigate the complex U.S. – Canada cross-border financial planning. Schedule a time below to speak with a cross-border planning specialist.
I am a Canadian citizen and I lived in the united states for 28years and I am on a disability pension here in Canada and was wondering if I could collect the money I put in too the social security system in the united states? I am 62 years old
Hi Roger, absolutely you can collect U.S. social security as long as you contributed to social security while working here in the U.S. You would have need to worked in the U.S. for 10 years, or at least 1.5 years and in Canada for another 8.5 years.
Thanks,
Bryan
Dear Byan, I’ve heard rumblings that WEP will be phased out. Do you have any news? Many thanks, Rick
Hi Rick, Yes, legislation to eliminate WEP is currently sitting in the House. It’s made it further than previous tries but still not a ton of traction. Let’s hope it passes.
Thanks,
Bryan
I am confused by this statement.
“You would have need to worked in the U.S. for 10 years, or at least 1.5 years and in Canada for another 8.5 years.”
How would working in Canada for 8.5 years make on eligible for Social Security? I thought it had to be 10 in the US. If I am working in Canada I would not be contributing to Soc Sec.
Hi, because of the U.S.-Canada totalization agreement you can combine US and Canada work experience as long as you work in the US for at least 1.5 years (6 credits).
Thanks,
Bryan
Hi;
My spouse will only have a small CPP vs mine. I will be impacted by WEP. If we do the CCP splitting thing, that will reduce my CCP and therefore my WEP? Is this a valid strategy?
Hi,
Unfortunately, the WEP reduction is based on your pre split CPP amount so it probably won’t help by splitting your CPP.
Thanks,
Bryan
Hi Bryan,
Informative article thanks! I’ve worked for 7 years in the US. Canada for 15. Is it better to go back to the States and work for 3 years to qualify for the 40 credits and retire. Or continue to work here in Canada for 3 more years. I contribute at the highest rate due to my income. In other words is adding 18 years of cpp to the 7 years of social security credits to qualify for social security better than getting the 40 credits by working again in the US?
Hi,
I don’t think there will be a major difference between staying in Canada vs. coming back to the states. You may be slightly better coming back here as social security tends to accrue faster than CPP. However, you are also missing out on some more OAS benefits if you come to the states. Overall, I wouldn’t base your decision to come back to the states on a higher SS benefit. I think the overall benefit will be pretty marginal if you do return.
Thanks,
Bryan
Bryan, I am a 60 year old dual Canadian/US citizen living in the US, have lived in Canada for 19 years and moved to the US in 1999. Will a municipal pension plan income also reduce my social security payment because of WEP?
Hi Ed,
Thanks for the question. Is your municipal pension from the U.S. or Canada? If from the U.S. it probably won’t reduce your social security, as long as you paid ss taxes while working there. If from Canada, it probably will impact social security as you will be subject to a higher WEP reduction.
Thanks,
Bryan
Bryan, question on CPP drop out calculation. I contributed to CPP from 1980 to 1999 before moving to the US in 1999. I am 60 years old and plan to draw my CPP when I am 65. Am I going to get a reduction in my CPP payout if I wait longer bec. I have not been making any contribution since 1999? If there is an impact, then I should start claiming CPP soon. Thank you. Ed
Hi Ed,
I typically don’t see a person get a reduction in CPP benefits by waiting to claim. However, I have seen benefits grow at a lower rate and by waiting receiving less than expected. You will want to reach out to Service Canada to get your estimate at age 60 and age 65. Certainly, if your benefits actually are reduced you would want to start benefits ASAP. I just haven’t seen this situation.
Thanks,
Bryan
If you wait from 60 to 65 to collect cpp, the added “zero” years of income from 60 to 65 will likely reduce your cpp in real terms.
CPP does increase by 7.2% each year that you delay from 60 to 65. However, because of WEP, many of my clients find it better to start earlier as opposed to delaying.
Thanks,
Bryan
Hello Bryan, I am a Canadian citizen, my husband is a dual Canadian US citizen. I have been researching spousal Social Security benefits. My understanding is that I am eligible to receive 50% of his benefit if I delay retirement to 66 years of age and 10 months (I was born in 1959). My husband began receiving benefits at age 62. I see that my benefit would be reduced by the WEP maximum; approximately $450 CDN per year as I receive CPP and a work pension. Do I understand this correctly? Thank you
Hi Rosemarie,
Thanks for the question. Yes, you are eligible to receive up to half of your husbands social security benefit. However, a spousal social security benefit is typically not subject to the WEP Reduction. Therefore, you will probably not have a $450 per month WEP reduction.
Best regards,
Bryan
Hello Bryan, I am an RN who worked in the US under a TN visa for 17.5 years and left to return to Canada 7 years ago. I have been trying to plan for future retirement in Canada and am struggling to find anyone (live in Newfoundland) who has any idea about my US SS benefits in relation to CPP and thus help with my retirement planning. I am 51 this year. Do you provide assistance with this for Canadians ? Your articles are very helpful.
Thanks in advance,
Corinna Simms
Hi Corinna,
Thanks for the question. Yes, I help many people help better understand and maximize their U.S. and Canada retirement benefits and accounts. If you are interested, you can schedule a complimentary meeting here: https://retiremitten.com/schedule-a-meeting/
Thanks Corinna, I look forward to speaking with you.
Bryan
Hello, Bryan
I lived in Canada as a “Landed Immigrant” (my husband and I are Americans),for 20 years. I was a homemaker caring for our 3 children. He worked for 23 years in Canada before our divorce.We returned to the US 25 years ago and a few years after returning my husband moved back to Canada and we divorced after 33 years of marriage. I worked in US for over 20 years and 31/2 years ago started collecting my SS benefits at age 66.
Am I eligible to collect a portion of my former spouse’s CPP benefits? If I collect CPP, how will this affect my SS benefit? The US benefit is only $6 hundred/ mo. after Medicare and taxes deduction.
Thank you so much for your response
Hi Chriss,
Thanks for the question. Yes, it is possible to collect part of your ex’s CPP. However, if you collect part of his CPP, he will get a reduction to his benefit. Therefore, many times this is determined at the time of divorce. You can still try to get some of his CPP now. If you do collect CPP, you will probably get a small reduction to your Social Security because of the Windfall Elimination Provision.
Thanks,
Bryan
Hi Bryan,
I am a Canadian and worked in Canada until I was 30 and then moved to the US and have been working here the last 33 years. I have a small CPP benefit I can collect and a much larger SS here. Since I;ve worked in the US for >20 years am I exempt from WEP?
Hi Ed,
You are exempt from WEP as long as you have more than 30 years of U.S. work. Yes, it does sound like you will be exempt as long as you worked more than 30 years.
Thanks,
Bryan
Bryan,
My situation is almost identical to Ed’s, the last question here. I had no idea there was a WEP until now, after already retiring. I just read that you have to have 30 years of “substantial earnings” in the US before you are exempt from WEP, not just 30 years of earning, so your answer to Ed is not necessarily correct. He should read the 2-page Soc Sec Publication 05-10045, which explains exemptions from WEP, including how “substantial earnings” is defined.
My wife and I are both age 69, each have a small CPP benefit which we’re not yet receiving, and each a larger but still not large US Soc Sec benefit that we are receiving. We have been in the US for 41 years, but we don’t meet the requirement of 30 years of “substantial earnings”, so if we file to receive our CPP benefits we stand to have our Soc Sec benefit reduced by $480 each or even more, which is way more than our CPP benefits. My question is … Can we legally avoid WEP by never filing to draw our CPP benefits? Is it “legal” to not draw CPP from Canada? And is this another legal way to in effect become exempt from WEP in the US?
Hi Clive,
You don’t have to collect CPP, there is nothing illegal about that. I’m sure Canada would be more than happy to keep the money.
The most your social security can be reduced is the lesser of the maximum WEP reduction ($480 in 2020) or 1/2 of your Canadian pension. If you have a small CPP, you can only lose up to 1/2 of it. Therefore, it is never a good idea to not collect your CPP. Half of your CPP may not be big, but it is better than nothing.
Best Regards,
Bryan
Thanks for the reply. What you say here is great news for us. I haven’t seen anything in WEP info that says “the lessor of the max WEP reduction or 1/2 of another county’s pension benefit”. Can you point me to where that is documented by the SSA?
Actually I just found it myself. The WEP document I referred to in my first message has a paragraph on this, which I had not interpreted properly when I first read it.
I also found this statement elsewhere: “The more years in which you had “substantial earnings” from Social Security–covered work, the less the provision (WEP) cuts into your benefits.” This is also good news for us.
Thanks for your help. I’m glad I found your web page.
Hi Bryan
I have worked 6 years in USA and will have worked 20 years in Canada when I retire. I was under the impression that I will not get social security since I do not have 40 credits (I have 24). I was thinking to do 4 more years in USA but after reading your website it does not seem to be necessary. Can you shed more
details on how it would work for me.
Hi Manj,
You should qualify for US social security given your US and Canada work experience. You can combine your US social security years worked plus your Canada years worked to qualify for US social security. This is because of the U.S. Canada Totalization Agreement. You can qualify for social security already, however, you do need 40 credits to qualify for Medicare. Thanks, Bryan
Thank you Brian how much social security would I get based on 6 years US and 20 year Canadian experience. From CPP calculations I would get around 1k per month CPP at 65 how much SS would I be able to get? An approximation would be good?
Hi Manj,
It depends on how much you are earning here in the states but $75 per month per year worked us a decent estimate. Roughly $450 – $500 per month or so from social security.
Thanks,
Bryan
Great article, Bryan! (Actually, your entire website is full of helpful info for people like me with US and Canada cross-border issues.)
1) I know that benefits (SS and CPP) are indexed (e.g. COLA) and therefore can change every year. But does a person’s max WEP reduction (e.g. $512 for 2022) stay the same each year?
2) I’m applying for Social Security benefits this year (no WEP reduction). When I eventually start taking CPP benefits (in some future year), how would I notify SSA of my CPP start date and any changes in my CPP benefit (as it is adjusted each year)?
Hi Pam, Thanks for the kind words.
1. Your WEP Reduction is locked in once you start your second benefit (in your case once you apply for CPP). However, the maximum WEP reduction does increase each year with inflation until you start CPP.
2. You will want to call or visit a SSA office to notify them of your CPP once you begin your benefit. Your WEP is locked in and will not change based on CPP increasing or the change to the exchange rate.
Thanks,
Bryan
Bryan,
I am a dual U.S./Canadian citizen. Worked in Canada from age 25 to 41. Moved the States and worked for 6 years before starting my firm.
My Social Security account shows I need 4 more years of credits. I have not been paying into Social Security for the last 4 due to illness and now as I am recovered thinking of going back to industry.
Question is, I cannot combine Canadian Pension Plan with Social Security right? I need a minimum of 10 years of paying into Social Security for that benefit and to qualify for Medicare.
We are no intending to go back to Canada but I need some clarity, if you can get credit with Social Security for the time you worked in Canada and get a reduced amount and qualify for Medicare. That’s what I have been told before by my former employer but reading your excellent site, believe this was very wrong information.
Regards
David
Hi David, Yes, you should be able to combine your U.S. social security years worked and Canada years worked to qualify for social security. However, the Totalization Agreement does not apply to Medicare. If you are going to stay in the states, you will probably want to have free Medicare (You can pay for it if you don’t have 10 years of U.S. work). Therefore, I would try to get another 4 years of U.S. work to qualify for Medicare.
Thanks,
Bryan
Hi Bryan, thanks for the posting. I worked in Canada for 8 years and have been working in the US for the past 16 years. I am thinking of retiring in 3 years at 62. Can I combine both US social security and CPP? What would be the implications? Can I start at the same time or do i have to start one earlier. Appreciate your help.
Hi Marc,
There is a lot to this question, but the simple answer is that you will receive both a CPP benefit and social security. You will probably have a small reduction to your social security because of CPP. They are separate benefits that can’t be combined. You apply to each country to begin and they don’t need to start at the same time.
Thanks,
Bryan
Bryan, Just to try and be clear on WEP or the Governement Pension Offset. My wife is eligible for the CPP and she is getting social security under her own record. So we have not claimed the CPP yet. My wife’s spousal benefit for soc sec will be much higher based on my earning record. Our plan has been to wait until I start collecting social security then have my wife switch to spousal benefits. My reading on this topic and your helpful articles and responses makes me conclude that the WEP will NOT apply to spousal benfefits? However, I heard a social security representative make a comment that the WEP will still apply to that portion of the spousal benefits on my wife’s own record and not the portion that gets ” uplifted” to the Spousal benefits based on my record. For example if on my wife’s own record she collects $800 per month and with total spousal benefits let’s say it is $1600 ( my portion on my record “uplifted” her $800 when she switches to Spousal benefits). Have you ever heard this or seen this happen? Also do you concur that the GPO will not apply becuase the CPP is a foreign pension and is exempted by Social security regulations?
Thanks
Tony
My wife moved and became a US citizen after our marriage. She is 61 now and gets a $400/month(US) CPP now. Will she be able to collect spousal US Social Security benefits at 62 in October?
Hi Shawn, yes, your wife should be able to collect a spousal social security benefit with no reduction because of her CPP.
Thanks,
Bryan
Dual citizen living in Canada. If I qualified for US SS based on earnings in the USA (20 years) without counting any work in Canada, am I still subject to WEP when I collect my CPP at age 70? When I apply for CPP, does Canada inform the USA so they can apply the WEP?
Hi Mark, Yes, if you have less than 30 years of U.S. work unfortunately you will be subject to the WEP reduction. You will want to inform SS that you are now collecting your CPP.
Great article, thanks, Bryan. I was reading through all the questions to see if mine was answered, but I’m still a bit confused. I worked for 20 years in Canada before moving to the USA. I now have 21 years of work in the USA. I’m divorced from my Canadian husband (who also lives in the US), and we were married for 25 years (divorced about 12 years now). He made considerably more money than I did. Can I income split SS and CPP? How does the WEP impact both retirement plans? Thanks for your help.
Hello, you probably can’t income split your CPP. If you receive some of his CPP benefit, he will get less so typically this is figured out during the divorce settlement. You are entitled to your own SS benefit or half of your ex husbands benefit, whichever is higher. WEP would decrease both your and your ex husbands benefit, and SS can determine which benefit is higher after the WEP reduction. WEP does not impact CPP.
Thanks,
Bryan
Hi there. My husband was born in Canada. I am a US citizen and moved there when we got married. When we moved back to the US, he was 35 and had worked in Canada since before he was 18. I lived in Canada for 6 years with him but did not work. He is now 50 and I am 48. He has been working in the US (as a US citizen) for the last 15 years that we have been here. I am starting to look at retirement planning and your website has been the most informative so far. With that, I’m still a little confused. I have lots of questions:
1 – How can we find out what is CPP and OAS benefits are (if anything)?
2 – I read somewhere that he had to have worked in Canada for 20 years after he turned 18 to get the CPP (I think it was). He only worked for 17 years after that. Does that mean he gets nothing or is it just reduced.
3 – I know in the US, I will get 50% of his SS. Does that apply to Canada benefits as well?
4 – This is the first I’ve read about the WEP. I have never heard of that before. How do I go about figuring out the best way for us to do retirement and how that might factor in?
5 – Do you offer paid services on situations like these? If so, where can I go to find out the cost and when I should do that?
Thank you so much!
Hi Tammy,
Thanks for the questions but there is just too much here to answer. I’d suggest scheduling a meeting with one of our advisors here: https://RetireMitten.com
Thanks,
Bryan
Hi Brian,
Your article is awesome and provided me with answers that the ‘expert in the Canadian and USA situation’ could not answer … he did not even know about WEP!
I’m a Canadian living in Montreal. I lived in the USA for about 14 years and contributed to Social Security for 13 years. So, I’m entitled to get SS benefits when I retire. Now, I have a Canadian spouse who will also be able to get Spousal SS Benefits. From reading the different comments, I understand that my spouse’s SS amount will not be affected by WEP from his QPP and Quebec Government employee pension plan (RREGOP).
The question I have is: what is the base from my SS benefit used to calculate my spouse’s SS Benefit? Will it be 50% of the amount I get, including the reduction due to WEP on my side? For example, assuming I get $2,000/month (based on $2,400 benefit – $400 WEP), will my spouse then get $1,000/month?
Thanks in advance for you help,
Luc
Hi Luc,
Yes, your math is correct. The spousal benefit is based on your after WEP reduced SS benefit. Your spouse should get $1,000 per month.
Thanks,
Bryan
Hello Bryan
Thank you for the informative article and comprehensive replies to comments!
I wonder if you know of a calculator in which one can use to determine SS payments expected based on the Canada / Us agreement, number of years worked in the US and one’s CPP payment amounts?
Or if you can give me a rough idea of what I would get in this situation
I am 65
My CPP payment is $250 per month
I worked in the US later in life, and my earnings on which I paid SS were $375,000
I worked in the US for 5 years.
Would you be able to estimate how much I could get in SS per month if I applied now?
Many thanks!
Mary
Hi Mary,
I’m glad you find this helpful. I find that you tend to earn about $50 to $100 per year worked. So if you have worked here for 5, years, your benefit may be between $250 to $500 per month. You may have a small reduction as well because of your CPP.
Thanks,
Bryan
Hello Bryan
Apologies this has taken so long, but thank you very much for your reply!
I wonder if you could clarify
1. I note that your estimate of $50 to $100 per year worked seems to cover everyone who comments. Does the actual number depend on how much was earned each year? I was earning quite a bit more than average during 4 of my 5 years. I see that SS does take into account actual amounts earned (using AIME and PIA) to determine monthly payments. In other words would my final payment be based on my actual earnings?
2. Using this website, if I understand correctly I found that I would not be subject to the WEP reduction on my CPP.
https://www.ssa.gov/international/wep1.html
The question asked is
“Are you entitled to, or eligible for, a U.S. Social Security benefit on your own Social Security number?”
I answered NO to this question as I cannot apply without asking Canada to get involved. A NO answer means no WEP. I wonder, do you think I am reading this right?
Many thanks again for all your excellent advice!
Mary J
Hello,
Yes, the more you earn the higher your benefit. You may be closer to $100 per month per year worked if you earned a lot during your time working in the states.
My understanding is also that if you need to use CPP years worked to qualify for SS, there is no WEP reduction.
Thanks,
Bryan
Hello, I am just checking to see if my previous reply has been received, thank you!
Hi Bryan,
Thank you again for your quick reply!
Kind regards
Mary
I just came across your site, and the great answers you have given – it has taken care of so many of my questions. Thank You!! I will definitely pass along your site whenever possible.
One question: You mentioned that Medicare required 40 quarters of work, (not being part of the Totalization Agreement), but my husband only has 20 quarters of work credit. Do you know if he could qualify for Medicare through my work history? I worked 20 years in the USA until we moved back to Canada and we are still married (happily if that helps!).
Hi,
Yes, if you qualify for Medicare your spouse (happily or unhappily married) will also qualify for Medicare. However, typically, if you don’t live in the U.S. you have to be a U.S. citizen to receive Medicare. So, you may not qualify if you plan to stay in Canada. Also, I’m not sure you’d want to pay for Medicare if you live in Canada.
Thanks,
Bryan
Hi Bryan.,
Fantastic site with so much helpful information. Kudos to you for this!
I have reviewed all the comments and your responses, but still feel you could help clarify one or two things for me.
I am soon to be 65 and my wife soon to be 61. I plan on fully retiring at 70 and delaying my CPP until then. Surprisingly, I recently found out that I am eligible for SS based on about 12 years of earnings prior to moving to Canada. My wife has never worked in the US.
Initially I thought I would take the SS right away and deal with the WEP in 5 years, should it still be around. Now I am wondering if my spouse would be eligible for benefits as well. In which case if I wait until 66/10 (full benefits for me), she would be over 62.
So. Have I misunderstood the spousal (eligibility) payment? And if she is eligible does it make sense to wait until she is at least 62 before applying?
Hello,
Thanks for the question. There is a lot going on here and maybe too much to answer via a comment. First, you may not want to turn on SS now as you aren’t FRA, so if you are working, you may have a lot or all clawed back. Yes, once you turn on your benefit, if your wife is over 62, she should also receive a benefit. It will be reduced if she starts early.
Thanks,
Bryan
Aha. I missed that! Clawback can happen if I take the SS prior to FRA at 66/10. Based on what I see as the clawback threshold, you are right most or all of my SS payment would be gone based on my employment income. So, lets assume I take it at 66/10. My spouse would be over 62/10 at that time. Are you saying her benefit would be reduced if she took it then vs at a later date? Your comment “It will be reduced if she starts early” is confusing me.
Thanks,
Rob
Yes, she would receive half of your full retirement age benefit if she waits until age 67. If she starts her spousal benefit before 67, she will get a reduced amount.
Thanks,
Bryan
Hi Bryan,
My husband worked in Canada for over 35 years and I worked there off and on for over 25 years. We have been living in the US for over 23 years and my husband has been working here the whole time. I have about 30 credits. Maybe a few more than that in the US but we are both collecting CPP and OAS as we both turned 65 at the end of last year (2023). My husband will wait till age 66 and 10 months as that way he can still collect income from our family owned business. Will I be able to collect my own SS although I do not have 40 credits in the US but plenty of work credit in Canada? Also will my husband have to wait for the full 66/10 in order to collect his full SS or would it be okay to start collecting at 66/2 since it will be the year he will be at full retirement age. He will still be collecting a weekly check at that time as a consultant for our company.
Hi,
Thanks for the email. Yes, you should be eligible for your own SS benefit given your U.S. and Canada work experience. However, you may get a higher spousal benefit than your own benefit. If you start SS prior to Full retirement age, you may get a reduction if your income is too high. That income limit is higher in the full retirement age year, but not eliminated.
Thanks,
Bryan
The WEP is quite significant especially if you have a private pension in Canada. It sounds like the best strategy is to delay CPP until 70 and take what SS windfall will give you until then. Once CPP combines with the private pension at 70, the windfall will be clawed back even more. Does this sound logical? Thanks
Bryan,
I have two comments on WEP-related issues that you and your readers/inquirers should be aware of, based on personal experience. I’ll do this in two posts because the forum won’t accept the length of both together.
1) The January 2024 SSA Publication No. 05-10045 titled “Windfall Elimination Provision” has some changes in it. For one thing, it now says “In most cases, we won’t reduce your Social Security full retirement age benefit by more than half of your pension amount.” The 2021 version of this publication used to say “We won’t reduce your Social Security benefit by more then half of your pension …” Notice the new phrase “In most cases”! Using their complicated formulas, SSA has computed my WEP deduction amount to be more than half of my CPP benefit. I don’t know whether there has been a change in the law that allows this, or whether they have just corrected the wording in the latest version of their publication. So, you should no longer tell people that the upper limit of their WEP deduction is half of their CPP (or other pension on which no Social Security was withheld).
Clive
Here’s the second comment:
2) When I notified SSA in August 2022 that I had started receiving CPP, they responded within one month and applied the WEP deduction to my SSA benefit in a very timely manner. However, my wife notified them in February 2023 that she had started receiving CPP and they still haven’t responded or applied a WEP deduction to her SSA benefit. She has contacted our local SSA office about this delay multiple times in the last 19 months and they always assure her that the WEP determination is coming soon! Your readers need to be aware that SSA has a major processing backlog in applying WEP deductions. This is a serious matter because it means they are overpaying you in the meantime and you will have to pay it all back once they have calculated your WEP deduction. So far, my wife owes SSA over $3,600 and there’s no way of knowing how much longer this will go on or what the final overpayment amount will be. Whenever she calls the local SSA office, they advise her to be setting aside part of her monthly SSA benefit amount for the “day of reckoning”.
I guess, like a lot of government offices, SSA is understaffed. Another example is … I appealed my WEP deduction amount back in 2022 when I thought they mistakenly calculated the amount at over half of my CPP benefit. Having waited for a response for 2 whole years, I just received their appeal determination letter!
Clive
Hi Clive, I appreciate your comments and sympathize with your situation. You never know what you will get when you speaking with SSA about WEP. Regarding comment 1. Are you starting social security after your SS FRA? This is where I see WEP be more than half of your CPP. The rule is half of your CPP at FRA, but the reduction increases by the same rate that your SS benefit increases after FRA, which is 8% per year.
Comment 2. Please keep us posted about the back withholding. SS regulations clearly state that if you tell them about your foreign pension and they don’t implement WEP, they can’t come back and charge you for missed WEP payments. Only if you forego to tell them, will they hit you with back pay. Thanks and let us know how it goes. Good luck.
Bryan
Hi Bryan,
Comment 1: We both started SSA benefits at age 67 and our FRA was 66, so yes we did start SSA benefits one year after our FRA. I had no idea that the WEP reduction upper limit increases every year after your FRA. I haven’t seen that in writing anywhere, certainly not in the SSA Publication on WEP that I referenced.
We both waited until age 70 to start CPP benefits (which was 4 years after FRA for both of us, but I guess that’s irrelevant). We wanted to maximize our CPP benefits, which stop increasing at age 70.
Comment 2: I’ll post back here when they finally get around to applying the WEP reduction to my wife’s SSA benefit and let you know if they require a payback or not. I had assumed they do. It seemed that they did on mine, but the time gap was so small I couldn’t quite tell. But in my wife’s case, my thought is … why else would the local SSA office have told us to save some of her monthly benefit for the payback?
Clive
Hi Bryan just wondering
If you have any Information on the current status of the WEP? I see in a group I am part of that the petition to eliminate WEP finally got the required signatures and may move forward finally to possibly be eliminated. How would this WEP elimination impact us Canadians both those retiring in the US or Canada? Would there be any
clawback from Canada side should WEP be eliminated?
Hi, it does seem like there is finally some traction regarding changing WEP. However, we have seen this before and it never made it to the finish line. I’m not sure WEP will be eliminated, but hopefully it will be changed and less punitive. I’ll keep you posted if I learn more. Thanks,
Bryan
Great thanks so much!
The Social Security Fairness Act (HR82) has cleared the House as of this week. Now the trick is “convincing Majority Leader Chuck Schumer and other members of Senate that this is a priority that needs to get done now.” It needs to get to the House floor for a vote. “The Senate’s companion to the Social Security Fairness Act currently has 62 cosponsors.”, so there is some hope it will pass in the Senate as well.
See https://federalnewsnetwork.com/pay-benefits/2024/11/legislation-to-eliminate-wep-and-gpo-clears-the-house/
Let’s hope it passes the Senate now!
Yes! Been watching it closely!
What happens if it doesn’t pass before Trump takes office? Is it all for nought at that point?
I really believe this needs to happen before Trump goes into office or it won’t happen. We’ll see.
The Senate actually voted on the Social Security Fairness Act today (Fri 12/20/24) and it passed by a 76 to 20 vote! Now it just has to be signed into law by President Biden. Here’s one site that talks about it:
https://trta.org/wep-and-gpo-repealed-u-s-senate-passes-h-r-82-trta-victory-helps-end-wep-and-gpo/
Fantastic news! Let’s hope this eliminates WEP for people with foreign pensions. We’ll know more once the law is finalized.