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Welcome to the Retirement Learning Center’s (RLC’s) Case of the Week. Our ERISA consultants regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans, and other types of retirement savings and income plans, including nonqualified plans, stock options, Social Security, and Medicare. This is where we highlight the most relevant topics affecting your business. A recent call with a financial advisor in Texas is representative of a common question on Social Security benefits.
“If a U.S. resident has worked in both the United States and Canada, how does that affect their Social Security benefits at retirement?”
Canada is one of 30 countries that have a “Totalization Agreement” in place with the U.S. This agreement allows the countries to coordinate Social Security coverage and benefit payment provisions for individuals who have worked in both countries throughout their working lives. Under Canada’s Totalization Agreement, specifically, work in one country can be recognized for eligibility purposes for retirement benefits in the other country.
Under the U.S. Social Security system, an individual must have a certain number of “work credits” based on length of employment to become eligible for a retirement benefit. Under the Totalization Agreement, if an individual does not have sufficient credits from work in the U.S. to qualify for a Social Security benefit, then credits from work in Canada can be counted to help the individual qualify for a Social Security retirement benefit.
However, while periods of employment in Canada can be used to help an individual become eligible for a Social Security retirement benefit, that service is not taken into account in determining the amount of the individual’s Social Security benefit. The benefit amount will be determined by taking into account only work in the U.S.
If an individual has earned sufficient credits from work in the U.S. to be eligible for Social Security retirement benefits, then work in Canada will not, generally, increase or otherwise affect the amount of their benefit. However, in that case, the individual may be able to use work in the U.S. to help them qualify for a benefit from the Canadian pension system, which covers them.
It should be noted that until recently, an individual who was eligible for retirement benefits in both countries may have had their Social Security benefits reduced under the Windfall Elimination Provision (WEP). However, the administration repealed the WEP under the Social Security Fairness Act, which was enacted in January of 2025. The Social Security Administration’s website indicates that the benefits of those previously affected by the WEP began to be adjusted in February of 2025, and adjustments will be retroactive to January of 2024.
Under the Totalization Agreement between the U.S. and Canada, a U.S. resident who worked in both the U.S. and Canada may be credited with work in Canada to help them qualify for a Social Security retirement benefit. However, in determining the amount of the individual’s benefit, the Social Security Administration will only consider employment in the U.S.