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US Social Security vs. Canada’s Old Age Security

US Social Security vs. Canada’s Old Age Security

They say that only two things are certain in this world: Death, and Taxes. As these two things are inevitable, there are means by which we can all prepare for the former, while making sure we become responsible citizens by taking care of the latter.

Both in the US and Canada, there are retirement funds, taxes, and schemes to be educated on to be able to maximize the benefits each government can provide for its retirees.

Retirement financial planning and funding in the United States is known as Social Security, while Canada have Old Age Security, otherwise known as OAS as its equivalent. These two schemes have their similarities as much as they both have their contrasts.

OAS is offered to eligible citizens aged 65 years or older. OAS pension payment is usually determined by complex rules, though generally, a person who has been living in Canada for 40 years, after turning 18, is eligible to receive the full payment of $533.70 per month. Apart from the OAS, Canada also has a retirement savings plan known as the Canadian Pension Plan. On top of this, OAS benefits also include Guaranteed Income Supplements ($732.65) and Allowances ($1,013.54) that are given to pensioners making less than $29,904 and $38,784 annually. OAS benefits are considered taxable income though.

On the other hand, US have Social Security. Compared with OAS, Social Security does not focus solely on providing retirement benefits; rather, it caters to other areas such as disability income, retirement income, Medicare, and Medicaid.

Social Security poses more complex income tax repercussions compared with OAS. There are many different factors considered under Social Security such as marital status of the recipient, plus income from other sources.

Upon turning 62, individuals become eligible for Social Security and full benefits of $2,346 per month upon reaching the age of 67. This eligibility is also determined through a credit system.

Generally, the retirement program of Canada is considered safer as there have been continuous debates that the Social Security funds of the U.S. will eventually be depleted. Though we sure all hope not!

 

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