Q. I lived and worked in Canada, earning income from 1969 through 1994.
I am a U.S. citizen, but my father was transferred to Canada when I was very young, and we became naturalized Canadians. I moved to the U.S. in 1994 and began earning income. I retired Jan. 31, 2013, and went to the local Social Security Office to apply for early benefits (I will be 62 this summer). I understand the reduction because I am taking early benefits; however, I was told that my benefit would be reduced if I was also going to take Canada pension. I can’t understand this, as I worked in Canada and contributed to Canada pension, and I worked in the U.S. and contributed to Social Security. The time periods (1969 through 1994 and 1994 through 2013) do not overlap. How can my Social Security be reduced? I could make no sense of it, and they were not very helpful in explaining it. Thus, even though I have earned my Canada pension, if I take it, my U.S. benefits are reduced, which I can’t afford. How is this possible, and how can I eventually get my Canada pension without a penalty to my Social Security?
A. According to the Social Security Administration, “If you work for an employer who does not withhold Social Security taxes from your salary, such as a government agency or an employer in another country, any pension you get based on that work may reduce your Social Security benefit.” For more information about the windfall elimination provision, go to http://ssa.gov/pubs/10045.pdf.