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After working for 20 years in Canada, I am now in the US on TN. I may return to Canada after working for 5-10 years. In Canada I contributed maximum CPP for 20 years. Question is: Have I reached my max CPP benefit? If so, is my contribution to US SS helping me if I don't contribute to it for 40 quarters. And if I do contribute for 40 quarters, will I be eligbile for both securities. Thanks. Jay
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This has been covered in detail in other posts, but, in short, you qualify for CPP because you worked a year in Canada; nothing you do in US will increase or decrease your CPP payout (which is not maxxed out at this point) For SS however, the fact that you have worked in canada for more than 8.5 years will mean that you will collect *some* SS with as little as a 6 quarters of SS contributions. The more you work in US past 6 quarters, the more SS you will eventually get. See totalization agreements on the international portion of the SSA website.
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Thanks Nelson. That means in my situation SSA contributions are not being wasted, even if I have maxed for CPP benefits. In other words from CPP/SSA angle it is better to work (& contribute) in US than in Canada. May be I should apply for benefit at 60 (at 66% of max) and continue to work/contribute in US. How may years for one needs to make max contribution for max CPP benefits.
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I don't even know if there is a max on CPP, but what does it matter? Your actual earnings will be of more benefit to you both now and in future than whatever your CPP or SS, so go where they PAY you more, not based on future benefits. Besides, the rules on SS and CPP change yearly, so don't plan on these.
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Thanks. I understand there is a max on CPP benefits (C$730 or so). I don't know how many years it takes to reach that. If one has already reached that, more CPP contributions will be just "wasted". I was asking this as I am thinking of applying for CPP benfits when I reach 60, and continue to work (& contribute to SSA)in US. Will this be a problem, I guess not, except that I will have to pay tax on CPP benefits
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SHrug. Like I said, $730 is the max today, and I seriously doubt that working 20 years would have maxxed you out, and that $730 will change by the time you retire. One thing you might want to consider is that OAS (you need 40 years as an adult to max this out) is clawed back if you earn more than XX dollars when living in Canada. It isn't clawed back when living in US. Also, OAS/CPP/SS will only be included in income 85% if you live in US, so you might want to be taking the necessary steps before retirement to secure a Green Card, so that you can live in US without working. Again, earning $1000/yr more at your job probably does you better in the long run than anything you do about CPP/SS etc.
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This link is useful for people in your situation:
http://www.ssa.gov/pubs/10045.html
There is a "Windfall Elimination" provision in SS that will drastically reduce your entitlement if you are also collecting CPP, even if you have worked the complete 40 quarters in the US.
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Yes. WEP is something to consider, although this should not affect one's decision as to where one works. There are strategies being developed by cross-border specialists to fight this provision, and by the time retirement comes, it may be gone (as might SS and CCP anyways).
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Thanks for the link. As CPP/SS might be gone, is't it better to start collecting CPP asap (55 or 60 whatever applicable) albeit at reduced rate even if one continues to work. It helps in two ways. You don't contribute, and you receive something.
Also, are SSN and SIN linked in someway? I mean are T4A, T4, W2 exchanged by cross-border agencies? What prevents one from collecting CPP as retired but continuing to work in US?
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I would begin collecting CPP as soon as I could (you can't collect before 60) especially if you've left Canada for US, since (a) you can't contribute from abraod, and (b) it is taxed at lower rate than in Canada, probably making equivalent to what you would have gotten had you waited 'til 65. What you do in US has no impact on CPP neither for eligibility nor for amount.
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Nothing is certain except death and taxes.
Having said that, my understanding is that the CPP is so well funded that it won't even need to begin drawing on its *investment* income for another 30 years. The CPP "account" is substantial and continues to grow as contributions are in excess of payouts.
Yes, one election could change everything, but it seems unlikely at this point.
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The loss of CCP will not come from underfunding, it will more likley come from clawbacks, like it has for OAS.
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... and EI and Family Allowance.
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I have a question. Employers send W2 and T4 to respective taxation agencies, but is information on W2 & T4 exchanged between US and Canadian agencies? What if someone (maintaining a home and filing in Canada but) working in US, just not include W2 income in Canadian tax.
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The US and Canada regularly exchange information, and, by the treaty, are allowed to help each other unearth and penalize tax evaders. If you live in Canada, you attest on your tax return that you are reporting ALL WORLD income, whether or not the IRS, or CRA actually know about it.
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Does this Windfall Elimination only affect those who are US residents? Does one have to deal with this Windfall Elimination if collecting SS and living in Canada? How about if living elsewhere?
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Tax and other financial matters concerning Canadian professionals
in the U.S. and U.S. citizens in Canada Includes income and estate taxation, social security, health
insurance, retirement accounts, cross border tax issues, and other matters affecting your pocketbook.
Topic Administrator: Mark T. Serbinski, CA, CPA of Serbinski
Weinberg, Ltd. CPA's and Serbinski Partners, Chartered Accountants
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