If you’ve lived and worked in both the U.S. and Canada, this is one of the most important financial decisions you’ll make, and getting it wrong can cost you tens of thousands of dollars over your lifetime. In this video, I break down how CPP and Social Security work together, when it makes sense to take one before the other, and the biggest mistakes I see Canadians in the U.S. make when claiming their benefits.
You’ll learn:
✔️ The key differences between CPP and Social Security
✔️ Why many people delay Social Security and take CPP first
✔️ When it actually makes sense to take Social Security early
✔️ How taxes and moving back to Canada impact your decision
✔️ A simple framework to choose the best strategy for your situation
Watch the video here:
⚠️ Many Canadians underestimate their CPP + Social Security benefits by $200k+ over retirement. Download your personalized estimate here:
👉 https://retiremittencalculator.base44.app/
Need More Help?
Are you interested in working with a financial planner specializing in cross-border financial planning? Schedule a complimentary meeting below, and let’s simplify your cross-border financial plan.
Summary
Quick recap
Bryan Haggard, a certified financial planner and chartered financial analyst, presented a video discussing the optimal strategy for claiming CPP and Social Security benefits for Canadians who have worked in both the U.S. and Canada. He explained that while both programs offer similar claiming options, the default strategy for most clients is to start CPP immediately and delay Social Security benefits due to the significantly larger average Social Security benefits ($2,000-$3,000 monthly versus $500-$600 for CPP). Bryan highlighted that the Windfall Elimination Provision was recently eliminated, allowing recipients to collect full benefits from both programs simultaneously without reduction. He outlined various scenarios where clients might choose different strategies, including situations with shorter life expectancies, spousal planning considerations, and policy risks for green card holders. Bryan recommended using a cross-border calculator to estimate benefits and develop personalized retirement income plans.
Summary
CPP vs Social Security Benefits
Bryan discussed the important decision of whether to take Canadian Pension Plan (CPP) or Social Security benefits first for individuals who have worked in both the U.S. and Canada. He emphasized that making the wrong choice can result in significant financial losses over a lifetime. Bryan planned to explain how these benefits work together and provide guidance on determining the optimal decision based on individual circumstances.
Cross-Border Retirement Planning Concerns
Bryan Haggard, a certified financial planner and chartered financial analyst, discussed the common concerns Canadians living in the United States have about their cross-border retirement plans. He explained that clients often ask about qualifying benefits, their size, and when to activate them. Bryan mentioned that his firm helps answer these questions and planned to address the specific topic of when to turn on CPP and Social Security benefits.
CPP vs Social Security Benefits
Bryan explained the similarities between CPP and Social Security, including the option to start benefits early or delay them for increased payments. He noted that while both systems offer similar benefits, Social Security typically provides significantly larger payments than CPP, with average Social Security benefits ranging from $2,000 to $3,000 monthly compared to $500 to $600 for CPP. This substantial difference in benefit amounts affects how cross-border clients approach retirement planning with both programs.
Social Security and CPP Strategy
Bryan explained that the misconception about Social Security and CPP benefits reducing each other has been addressed with the elimination of the Windfall Elimination Provision about a year and a half ago. He outlined a default strategy for most Canadian clients living in the U.S., which involves turning on the CPP benefit immediately and delaying the Social Security benefit in retirement. Bryan noted that while this approach works for many clients, individual strategies may vary.
Social Security vs CPP Benefits
Bryan explained that delaying Social Security provides greater benefits than delaying CPP, particularly because Social Security benefits tend to be larger. He noted that for each year Social Security is delayed, benefits could increase by $100 to $200 per month, compared to only about $40 for CPP. Bryan also highlighted that delaying Social Security creates an insurance policy for married couples, as the surviving spouse would receive the larger of the two benefits, while CPP only provides up to 60% of the deceased spouse’s benefit.
Early Retirement Strategy Discussion
Bryan discussed a common retirement strategy involving starting CPP early and delaying Social Security benefits as a bridge approach. He explained that this strategy provides income in early retirement years through Canadian OAS benefits, IRA, and RRSP withdrawals before activating Social Security later. Bryan noted that while this approach is the default strategy, it’s not suitable for everyone, as some clients choose different timing for CPP and Social Security benefits based on their specific situations.
Social Security Early Claim Factors
Bryan discussed factors that influence the decision to claim Social Security benefits early, including shorter life expectancy, spousal planning considerations, and the need for immediate income. He explained that for single individuals with shorter life expectancies, delaying benefits may not provide significant benefits, and highlighted the importance of spousal planning, noting that delaying benefits could result in lost income for the spouse. Bryan also mentioned that some retirees may need to claim benefits early to maintain their retirement plan’s viability and addressed concerns about policy risks for non-citizens planning to return to their home country.
Cross-Border Retirement Benefits Framework
Bryan presented a framework for deciding which strategy is best for cross-border retirement benefits between Canada and the U.S. He explained that individuals should estimate their benefits from both countries, considering starting earlier versus delaying, and use the provided cross-border calculator to run scenarios. Bryan emphasized that the goal is to maximize total income rather than focusing on individual benefits, and encouraged viewers to schedule a call with his team for personalized advice