Will Social Security Cuts Hurt Canadians Living in the U.S.?

Added: 2026-05-14

[00:00:00]If you've been watching the news lately, you've probably seen headlines saying Social Security could run out of money in the next several years. And for many Canadians living in the US, that creates a lot of anxiety. Will benefits be reduced? Should you claim earlier? Could your retirement plan be impacted? And if you've worked in both Canada and the US, how do CPP and OAS fit into all of this?

[00:00:25]Today I want to break down what's actually happening with social security, what this could mean for Canadians in the US and and most importantly what should you be doing right now. Now I don't think the sky is falling but I do think this creates some very important planning considerations that many people are overlooking.

[00:00:50]For those of you who are new here, my name is Brian Haggard. I'm a certified financial planner, chartered financial analyst. I'm the founder of Retirement and Financial. We specialize in helping families who have lived and worked in both Canada and the US navigate this tricky crossber retirement planning. And one of the areas that I help our clients with is coordinate coordinating their Social Security and CPP and OAS benefits. And just this week, I got a question from a client that said, "Hey, Brian, if Social Security is going to run out soon, shouldn't I turn my benefits on now?" We're going to talk about that in this this video today. So, let's talk about what's really going on.

[00:01:35]You'll often hear people say Social Security is going bankrupt, but that's not really accurate. What's happening is that social security trust fund is projected to become depleted sometime in the early to mid 2030s if no changes are made. But even if that happens, payroll taxes would still continue coming into the system. So this is not a situation where benefits would suddenly disappear overnight. Instead, current estimates suggest benefits could potentially be reduced by around 20 to 25% if Congress does nothing. Most likely, we'll see some combination of higher payroll taxes, higher full retirement age, reduced benefit for higher earners, or other gradual adjustments. So, it's I think it's important not to panic, but I also think it's not important. It's important not to ignore this because if you're a Canadian living in the US, your retirement planning may be already more complicated than most people realize.

[00:02:40]Now, I actually believe that people who have worked in both the US and Canada might be the least impacted if Social Security is cut in the future. And why is that? Most of the families that we work with have at least three sources of income coming in, but if they're married, a lot of times there's six different streams of income coming in.

[00:03:04]That's social security, CPP, and OAS for each family member. That means six different social security benefits coming in from both the US and Canada.

[00:03:17]And what we actually find is that most of the clients that have lived and worked in both the US and Canada receive more in total between those three sources than if they had worked in just the US or Canada. And so if they just end up reducing social security, although for a lot of people social security is the largest of those three benefits, if that's the only benefit they end up reducing, it may not impact those crossborder retirees as much as those people who are only collecting benefits from social security. and the fact that crossber retirees a lot of times receive more especially now that the web reduction has been eliminated the social security elimination may have even smaller of an impact although I don't want to downplay it still would be a huge impact if social security is reduced certainly if it was eliminated as for most of our clients it's the biggest source of income in retirement but do I actually believe that Social Security will be cut. Probably not. So, no, I don't believe that people who are in retirement or near retirement are all of a sudden going to wake up in a few years and have major cuts to their Social Security benefit. If any politicians enacted that, that would be political suicide. So, what do I think will actually happen? What can realistically happen? Personally, I think it's going to be the younger generation. People that are further away from retirement, they're are going to be impacted the most. People like myself who still have 20 years until full retirement age. And what we'll probably see is that uh payroll taxes might end up going up. We may actually raise the wage cap. So, right now, if you earn over a certain amount of money, you stop paying into social security. that may be eliminated. We might start to gradually increase the full retirement age or we may even reduce future benefits maybe even uh for spouses or survivor benefits which right now are pretty robust. So, there's a lot of things that I think will change, but one of the things I don't think is going to happen is all of a sudden retirees or people near retirement are going to have this huge cut to their social security benefits that would cause financial havoc in the United States as well as other places.

[00:05:54]However, there are some people who I have special concerns about. Now, as I mentioned, I don't think there's going to be major cuts for most retirees or pre-retirees.

[00:06:05]However, I am nervous about one certain group of people, and those are some of the people that we work with. Those would be green card holders who are currently in the United States, but are planning on giving up their green card in retiring back to Canada. We are already starting to see noncitizens and non-residents of the United States be singled out. There's a bill right now that is proposed. It's not going anywhere, but it's proposed to eliminate social security benefits for non US citizens, non US residents. And that would be those people who would give up their green card and move back to Canada. And a lot of our clients, that's their situation. They don't want to become US citizens. And when they return back to Canada, they want to collect their full Social Security benefits that they're entitled to, that they've paid into. However, this is and although I don't think this bill is going to make it very far, as we get closer and closer to this date where the Social Security trust fund could be could start to run dry, we might see more and more attacks against those non US citizens, those non-residents starting to eliminate either their benefits or their spousal benefits. That certainly isn't set in stone, and I don't believe it's fair at all. But if I was a green card holder and I was planning on giving up my green card, I would be a little bit concerned about my social security benefit if I wasn't in the United States. And for those type of people, I may consider turning on my benefits earlier because of that. So what should you do now? For our clients that are US citizens or are planning on staying in the United States, their retirement plan has not changed. We're still under the assumption that they're going to receive their full retirement benefit from Social Security for the rest of their life as well as their OAS benefit and their CPP benefit. And and and because of that, we're not turning on their benefits earlier to try to get it before it's out. I know some of our clients, they do want to use that method, and that's fine. We're not going to stop them. But for a lot of our clients, that's not the case, and it's business as usual. When we go through the retirement plan, we figure out what's the best strategy for them. Is it to turn it on early? Is it to delay?

[00:08:30]There's a lot of different strategies we can look at. If you are planning on leaving the United States and you're planning on giving up your green card, I still don't think you're going to lose your benefits, but you are at more at risk. And for those clients, they may decide to turn on their benefits a little earlier in order to make sure they get it as much as possible before the benefits potentially run out in the future or are cut in the future. If you've lived and worked in both the US and Canada and want help understanding how Canada pension, OAS, social security all work together at different ages, we've built a free retirement crossber retirement calculator that gives you an idea of what your benefits will be from both the US and Canada at different ages and that can help you start to build your crossber retirement plan. However, if you're looking for more assistance, if you're looking to work with a crossber financial planner to help generate a retirement income plan, a crossber tax strategy to make sure that you're on track for retirement. You can schedule a complimentary consultation with one of our financial crossber financial advisors below to help you understand where you stand today and how we may be able to help you get into and have a more successful retirement. If you found this video helpful, make sure to like and subscribe below because we release new videos every single week that are focused on Canadians who have lived in the United States. Thanks again for watching. A tartism.