Social Security paid by Canadian US resident - Ask an

This was sent to George Arora, CPA, MBA, MST (Masters in Taxation), a CPA in
our office by one of our clients.
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 Hi George: What do you know about the Social Security I have paid down
here?
 It has been deducted from me for 3 years now at about $5000.00/yr.
           Thank You
           Gxxxxxxx
-----------------\r
Gxxxxxxxx, George Arora  has passed your note along to me.
You are getting credit for Social Security in the USA.  Under the terms of
the US / Canada Totalization Agreement, if you are not in the USA for 10
years or enough to pay into it for 40 quarters, then you can use some of
your Canada Pension Plan contribution years to boost your US Social
Security.  You should be getting US Social Security unless they change the
rules before your retirement.
At the moment, if you had done this any time in the last forty-one years
(the number of years I have been in this business), you would have received
a larger retirement pension with the combined contributions than if you had
only paid into Canada Pension Plan.
In addition, if you pay into it for 7 years and decide to stay in the USA,
you get the opportunity to buy the full Medicare benefits which are as good
or better than "any" Canadian Provincial Medical Plan.  Today, it would cost
you about $300 a month after 7 years, $250 a month after 8 years, 200 a
month after 9 years and $100 a month after 10 years of contributions to
Social Security and Medicare.
Having the medical makes it feasible for you to retire to Texas or Florida
or California.  If you do not qualify for the basic medical, than it is
prohibitively expensive to buy medical coverage to retire to the USA.
The same things are wrong with the CPP that are wrong with Social Security.
We are going from the sixties when there were 15 to 20 workers for every
recipient to the 2020's when there may be as few as 2 workers for every
recipient.
Therefore the amounts of Social Security and Canada Pension are both going
to be reduced in terms of spending power.
This makes it even more important that we all look at our finances and
prepare to fund the major portion of our retirement and not plan on
depending upon Government handouts.  Neither the OAS and CPP or Social
Security truly fund themselves at the moment.
Hope this helps.
david
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