Old Age Security vs. Social Security
America's Social Security system is remarkably different from Canada's Old Age Security programs. (Although Canada also has retirement savings plans, such as the Canadian Pension Plan, they will not be compared with Social Security in this article.) Financed by Canadian tax dollars, OAS provides benefits to eligible citizens 65 and older. There are complex rules to determine the amount of the pension payment, but typically a person who has lived in Canada for 40 years, after turning 18, is qualified to receive the full payment of $533.70 per month at age 65.
Additionally, Guaranteed Income Supplements ($732.65) and Allowances ($1,013.54) are provided annually for pensioners making less than $29,904 and $38,784, respectively. OAS benefits are considered taxable income and carry certain payback provisions for high-income earners.
Social Security, on the other hand, does not focus exclusively on providing retirement benefits and includes additional benefits such as disability income. Social Security income tax issues are slightly more complex and depend on such factors as the recipient's marital status and whether income was generated from other sources. (Information provided in IRS Form SSA-1099 will determine the tax rate for the benefit.) Individuals are eligible to receive partial benefits upon turning 62 and full benefits ($2,346 per month as of 2011) once they are 67.
Eligibility is determined through a credit system whereby qualified recipients must obtain a minimum of 40 credits, and they can earn additional credits to increase their payments by delaying initial benefit payments. Generally, Canada's retirement programs are considered more secure, as there are concerns that the U.S. will eventually deplete its Social Security funds.
Quality of life
Both Canada and America typically rank near the top of the United Nations' Human Development Index, which uses such factors as life expectancy, education and standard of living. However, Canadian retirees find life after work to be much less stressful, as fears about running out of money are not as prevalent. As a result, American retirees more often tend to find alternative sources to supplement their retirement incomes.
The major benefit for Canadian retirees is the publicly funded health care system, which provides essential health services to its residents. America's private health care system, on the other hand, puts a much greater financial burden on retirees. A study by the Employee Benefits Research Institute estimates that a 65-year-old couple without employer health coverage will require approximately $700,000 to comfortably cover out-of-pocket medical expenses not paid by Medicare.
Conclusion
Regardless of the retirement destination, the same basic rules apply to both countries. Do not wait until age 50 to begin planning, focus on safe investments, save a substantial portion of your monthly income, build an emergency fund, and use the financial plans available for tax-efficient retirement investing.




