Retirement Planning

[LN]

I am a Canadian who has been working in the US for about 8 years. I am thinking ahead to early retirement in a few years - perhaps in the Carribean. I have been paying Social Security tax in the US for eight years (and I understand 10 years is the minimum time I would need to pay into it in order to be eligible to collect on retirement) I also paid into CPP in Canada for many years prior to moving to the US. Can I collect from both when I retire? If so, at what age? What kind of withholding will the US take if I retire in Canada and vice versa?
I have also paid into 401K in the US and have RRSP accounts in Canada. If I leave my current job, should I roll my 401K into a Traditional IRA? What kinds of penalties would I be looking at? If I am living outside of the USA when I retire, will I be subject to a withholding tax when I begin to withdraw funds from it? It seems oh so complicated! Any advice you can offer would be appreciated. Thanks.

[nelsona]

First off, because you paid into CPP, you only need enough quarters in US to make up the ten years between CPP and SS, so if you already worked 10 years in Canada, you were SS-eligible after less than 2 years in US.

The more you work in US of course , the beter your SS will be, but you have already qualified for SS.

The witholding you pay US and Canad on your SS and CPP (and OAS by the way) will depand on the tax treaty they have with your new country, and whether or not you keep your US GC or citzenship.

Same for RRSPs and 401(k)s. You will not pay any penalty to roll your 401(K) into an IRAS -- that is the point of doing such a rollower, no?

[DallasBill]

Let me ask a follow up on this statement, as I did not know this: "First off, because you paid into CPP, you only need enough quarters in US to make up the ten years between CPP and SS, so if you already worked 10 years in Canada, you were SS-eligible after less than 2 years in US. "

I worked 20 years in Canada, and now 5 years paying SS in the U.S. (after being 5 years SS exempt via the temp worker tax treaty and CPP being paid in Canada by my employer-parent-company there).
As you know, SS sends a statement every year showing how many qualified quaters of work you have towards your SS. Is there a mechanism for letting SS know about your "previous qualification history via CPP?" Or, does one not worry about this until one actually retires?

[nelsona]

If you do not get 40 quarters of SS, then, as you approach collection date, you contact SSA and they will get CPP info. If you get 40 quarters, then CPP doesn't help you.

By the way, iif you don't get 40 quarters you don't qualify for medicare, regardless of your CPP, so I would be making sure I get my quarters.

SS won't help you to increase your CCP, since you already qualify, however it can help you collect your OAS at 65, if you have not live 20 years in canad (past age 18).

Again this would be dealt with as you approach 65.

[nelsona]

that was past age 18.

[DallasBill]

Thanks very much! I'll get the 40 quarters regardless, but this is good to know.