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Understanding the Canada-U.S. Totalization Agreement

Many Canadians and Americans face the reality of a career that spans both sides of the 49th parallel. Amidst an era of globalization, it is common for promotions to create cross border opportunities and for company restructurings to force a long-term cross border move. The result of having a career on both sides of the border can lead to some confusion over how an individual’s history of employment can be quantified, relative to the necessary requirements to qualify for each country’s pension plan. Specifically, how are my Canada Pension Plan (CPP), Canadian Old Age Security (OAS) and U.S. Social Security (SS) benefits affected by my work experience in both Canada and the U.S.? What if I don’t meet the minimum eligibility criteria to qualify for these pensions?

Let’s re-examine the eligibility requirements for these three pension plans: CPP and SS are based upon one’s earnings record. The difference is that the SS minimum criteria for eligibility requires ten years of service, while a CPP benefit mandates only a single payment into the pension in order to become eligible. OAS criteria follows a different qualification path based upon residency rules vs. work history, specifically, the amount of time one has resided in Canada since the age of 18. A full OAS benefit is paid once the individual has amassed 40 years of Canadian residency since the age of 18. A partial benefit can be paid when the applicant has a minimum of 10 years of Canadian residency (assuming Canadian residence when payments commence) or 20 years of Canadian residency (assuming U.S. residence when payments commence). For more specific details on CPP, OAS and SS, please visit: “Cross Border Retirement Income: Canada Pension Plan, Canadian Old Age Security, U.S. Social Security and the Windfall Elimination Provision.” The question thus remains; what if I do not meet these eligibility requirements?

This concern marked a call to action and on Aug. 1st, 1984, the birth of the Canada-U.S. Totalization Agreement came to be. There was a subsequent amendment on Oct. 1st, 1997. The manifestation of this Agreement allows an individual to “totalize” their history spent north and south of the border to qualify for U.S. Social Security and/or Canadian Old Age Security. The tallying of cross border residence/work history in tandem allows an individual to potentially meet eligibility requirements that would not have otherwise been met if U.S and Canadian histories stood in isolation from one another. It’s imperative to recognize that although the Agreement tackles the pension (OAS or SS) qualification hurdle, it does not enhance the resulting benefit in question. In other words, your U.S. Social Security benefit will be based upon U.S. work history and your Canadian Old Age Security will be centered on the duration of Canadian residence beyond age 18. Let’s review a few examples.

Mr. Smith, a Canadian citizen and U.S. green card holder, decides to retire in 2019. His career culminates under the following circumstances: thirty years working in Ontario for GM Canada and six years earning gainful employment income under GM U.S. in Detroit. Mr. Smith decides to return to his roots back in Canada. For simplicity’s sake, let’s assume he has spent forty years in Canada beyond the age of 18 by the time he reaches 65. In this case, he qualifies for a full OAS benefit and a CPP benefit based upon his Canadian earnings record, but he does not meet the minimum years of service when he was employed in the United States to qualify for U.S Social Security. In steps the application of the Canada-U.S. Totalization Agreement, allowing Mr. Smith to leverage his CPP credits to make up the 4-year deficit in order to meet SS qualifications. Even though Mr. Smith now qualifies, his SS benefit will be based upon his six-year earnings record vs. the ten-year minimum requirement. Had the Agreement not existed, Mr. Smith would not have been able to receive any SS benefit.

Let’s turn our attention to how the Agreement can play out in a slightly different scenario. In this scenario the circumstances are as follows: Ms. Jones is a U.S. citizen and Canadian permanent resident. She has spent all but five years living and working in the U.S. with  plans to continue Canadian residency  going forward. With only 5 years as a Canadian resident, Ms. Jones has not met the ten-year minimum residency requirement to receive a partial OAS benefit.  The Agreement, though, triggers the ability to pull U.S. residence history to bring total residency time to the minimum OAS requirement for partial OAS benefits. However, it does not boost the OAS benefit to a higher amount, rather, it simply allows Ms. Jones to qualify to receive an OAS benefit based upon the five years she has resided in Canada since the age of 18. Like the previous example, had the Agreement not been made, Ms. Jones would not have been able to meet the qualifications for OAS eligibility.

With this scenario in mind, how does one apply the Agreement to claim their own pension benefits?

The pension plans of Canada and the U.S. communicate with each other quite well. As such, if you live in the U.S. can visit or write any U.S. Social Security office to apply for either U.S. or Canadian benefits.

If you live in Canada and hope to apply for U.S. benefits simply visit or write to any U.S. Social Security office located near the border.

So where do you find yourself? Are you caught in the middle of this unique issue? You are not alone in your quest to find a path forward. With regulations and agreements constantly in flux, it’s important to examine your options through the lens of current cross border agreements. To find out more, contact Cardinal Point.


Video Conferencing System for Business


In this competitive business world, effective and reliable communication can be the difference between success and failure. Video conferencing is the answer of present challenges in business communication. With video conferencing, it allows face to face communication real time between two or more people from different locations. This system allows better, faster, and more effective interactive collaboration. Embracing video conferencing system allows your business organization to improve collaboration between business departments and external parties. This will help the organization to become more competitive.

Middle East and Africa are predicted to have bigger role in world economics and no wonder many business organizations are turning into these regions. United Arab Emirates already becomes the business hub of the region and now wonder, the demand of video conferencing system for business is quite high. If you are looking for the prospect of embracing video conferencing system for business purposes, it must be started with looking for the ideal system and the right provider to supply the system. VDS Arab Emirates is the leading name for video conferencing system in this country and the whole region. It is the authorized provider and supplier for ClearOne Dubai.

As the market leading brand, ClearOne is committed to develop and provide the most advanced video conferencing and collaboration solutions. The state of the art video conferencing system from ClearOne is designed to be compact, easy to install, and easy to use while it incorporates the latest technology. The system is feature rich and supported with cloud technology for more powerful and more secure media collaboration solution.

Contact VDS Arab Emirates for more information about ClearOne video conferencing system and which solutions would be suitable for your business needs as well as your budget. The highly trained and experienced staffs will provide complete assistance to make sure you will get the right solution.

American Taxpayers Immigrating to Canada: Maximizing the Roth Conversion Strategy


Starting a new chapter in your life by relocating north of the border can be exciting. However, there are many financial and tax implications to take into consideration before you embark on this path. Whether you are an American citizen, a Green Card holder, or otherwise a U.S. resident taxpayer, you may have built up a significant amount of tax deferred investments via IRAs, 401ks, and other types of employer sponsored plans. Once a Canadian tax resident, distributions from most of the plans will be taxable in Canada. In general, the tax rates in Canada for individuals are higher than those in the U.S., and the highest marginal tax brackets are reached at lower levels of income. As such, it is possible that future withdrawals from these U.S. investment vehicles will result in a significantly higher income tax liability than would have been paid had you remained in the U.S. With proper counsel, there is an opportunity to mitigate this situation with some proactive planning.

With the advent of the Tax Increase Prevention and Reconciliation Act, the shackles of income restrictions on Roth conversions were removed. This presents a tax planning opportunity for many Americans, especially those who are considering a move to Canada.

A Roth conversion allows investments held in Traditional/Rollover IRAs, SEPs, and Simple IRAs to convert to a tax-free Roth IRA. The fair market value of the converted amount would be included as ordinary income for the year in which the conversion takes place. Although markets cannot be timed, in theory, the optimal window to convert is when the values of the stocks within the accounts are down, as less tax would be paid on the conversion. The rationale on this strategy includes: diversification of account types to manage future tax liabilities, paying tax at marginal tax rates today in order to avoid paying tax at potentially higher rates in the future, and blessing loved ones with tax free assets as part of your estate plan.

For the American taxpayer planning to relocate to Canada, this presents a golden opportunity. As part of the 5th protocol to the Convention between Canada and the United States (“the Treaty”), Roth IRAs are considered pensions and as such, both the U.S. and Canadian governments recognize the tax-free status of Roth IRAs. This means that if one were to convert a traditional IRA to a Roth IRA prior to moving to Canada, one would completely avoid further taxation on the account basis and any subsequent growth. For many individuals, this minimizes the combined tax liability for the two countries and maximizes what you are able to pass on to your heirs.

To get more granular, let’s view this strategy within a specific context. Let’s say you were approached by your employer regarding an opportunity to transfer from Houston to Calgary. You ponder the move since you always wanted to experience life with the Rockies at your doorstep. You have a 401k in the U.S. that is eligible for rollover to a traditional IRA, with $300,000 currently invested. Since your employer’s offer dictates a move during the spring of the following year, you essentially have two tax years to exploit the Roth conversion opportunity by converting $150,000 prior to the completion of the current tax year, followed by the final $150,000 conversion in the new tax year prior to your spring transition date. This strategy would split the tax liability over two tax years and potentially keep you in a lower tax bracket for each year. Let’s assume that, your federal marginal tax rate is 24% on each conversion ($36,000). Since Texas has no state income tax, as a resident, you would have no state tax your total tax liability to the United States would be 72,000, spread over two tax years, and you would pay nothing to Canada when you take distributions.

Let’s compare this strategy to what would take place if you were to move to Canada and maintain the $300,000 in the 401K. As a resident of Alberta, the 401K would eventually be transferred to a rollover IRA, and you would take distributions later in life. Since the highest tax brackets are reached at much lower income levels in Canada, in this particular example, the distributions from the unconverted 401K, assuming the same income level, would be taxed at around 48% in Alberta (current combined federal/provincial rate). This is double the 24% tax rate of the conversion. Converting the 401K to a Roth IRA prior to becoming a Canadian tax resident would have resulted in effective tax savings of 50% on the $300,000 in question. As well, the growth within the Roth IRA on the original $300,000 would have been free from taxation from either country.

As outlined by the above example, employing a Roth conversion strategy prior to establishing Canadian tax residency could result in substantial tax savings for many individuals. It is important to note that the amount of tax savings that would result from this strategy are highly dependent upon the specific facts and circumstances of each individual as well as future tax and exchange rates. In addition, this strategy is also dependent upon filing the proper Treaty-based election with the filing of your first Canadian resident income tax return. As a result, it is paramount that you seek the guidance of qualified Canada-US Cross-Border financial advisors and tax professionals  prior to making any decision regarding this strategy. Feel free to contact Cardinal Point if you have further questions.

Charge Devices in Your Car Easily


In this digital and internet era, it seems like we always need to bring our smart devices such as smartphones, tablet, and music players everywhere. Since they can do so many things, it is usual that their batteries are drained easily and we need to charge them for like every 5 hours or so. If you are commuting with your car, now you can use this charger from the car charger manufacturer conveniently.

SHOUNUOXIN Car Charger Products

Getting a car charger from SHOUNUOXIN is super easy as they have wide variations of the car chargers. If you need two different kinds of ports in one plug in the car, you can try to check out the PD Car Charger and the USB C Car Charger. Both of these chargers are able to charge your devices faster regardless of its small and handy size.

Another kind of products from SHOUNUOXIN is a car charger with 2 ports. You can choose your likings and needs on their official website on the link below. Generally, they have 5 different types in colors of pink, silver, black, and red. These chargers are also able to fill the batteries of your devices fast in full speed charging.

Do you feel like you need more than 2 ports? To make you travel more comfortable with your family and friends, SHOUNUOXIN also provide chargers with 3 and 4 ports. Do not worry, these many ports will not affect the charging speed. All of the devices can be full quickly as well.

How to Buy

It is very easy to buy these amazing car chargers. You can simply go to their website. And then make your choice of your favorite ones. Just click on the picture on the site, and then you can start type on your name and email. After that, write a message about the product you want to get. Then, you can click the “Send Now” button to notify them and wait for the reply from the car charger manufacturer.

IQOption Review

Being a fairly new niche in the finance industry, investing in the options market should be taken with extra caution. The market is not entirely regulated and there are still some inefficiencies that require attention. Another necessary precaution is finding a broker that allows options trading. And if there is anything certain in such an uncertain world like equities trading, it is that you can find a plethora of options brokers. We will be delving into one of these brokers – IQOption.

New PictureIQOption was one of the first brokers to participate in the options market. They were founded early and are considered proven experts in the niche. Their trading platform is mainly electronic and has not changed since their creation. “Keep things simple” seems to be the motto of the brokerage firm as it shows in most facets of their management. The broker’s website is straightforward and requires a minimal learning curve. In fact, IQOption offers newbies with specific instructions of how they can start their trading. Although, IQOption’s site interface seems to be more fitting for newcomers in the trading arena rather than professionals with a higher degree of demand and expectation.

In terms of payout, IQOption provides decent returns on your investment capital, depending on what instrument you are trading as well as your preferred expiration time. Furthermore, the firm also ensures a money back in the event that your predictions on a particular trade is rendered invalid. This gives you specific information as to how much you will lose on any given trade thus enabling you to plan and manage your risk portfolio. The minimum deposit for IQOption to start trading is low compared to other brokers.

IQOption provides a range of tradable asset and is growing as time goes by. They provide trading in different niches including foreign exchange options, stock options, commodity options, and index options. For more details visit this page:

The available platform from IQOption is downloadable online and you can create an account from virtually anywhere as long as you have a computer and reliable internet connection. You can also choose to receive text notifications to inform you of your trading results and open positions. You are given four expiration times on most, but not all, of the tradable assets – hourly, daily, weekly, and monthly.

Customer support is available in different languages for foreign investors and traders alike. Their website sports a unique “Call Me Back” feature where you get an immediate response from a friendly staff member in an hour or less. A live chat feature was missing though and should be included to improve convenience and quality of customer care. IQOption offers their customer support service 24/7 so you don’t need to worry about different time zones hindering you from getting support as fast as possible.