How WEP Shortchanged Retirees—and Why Its Repeal Is a Win for Fairness
Written by Carson Hamill CIM®, CRPC®, FCSI®, Associate Portfolio Manager and Assistant Branch Manager & Dean Moro BComm, CIM®, Associate Portfolio Manager
Did you know that a little-known rule called the Windfall Elimination Provision (WEP) has been quietly shortchanging millions of retirees for decades? For public service workers and cross-border retirees like Susan, WEP felt like an unfair penalty for a life of hard work. But thanks to the Social Security Fairness Act of 2023, WEP is finally history—paving the way for a fairer and sweeter retirement.
Meet Susan: A WEP Story
Susan spent 30 years teaching in Ontario, diligently contributing to her Canadian pension. Earlier in her career, she worked in the U.S. for a decade, paying into Social Security and earning enough credits to qualify for benefits. When retirement arrived, Susan felt confident—she’d worked hard, saved responsibly, and followed all the rules.
But then came WEP, slashing a significant portion of her Social Security benefits simply because she also received a Canadian pension. To Susan, it felt like a punishment for working internationally and being financially responsible.
Fast Forward: Life After WEP
Now, imagine Susan’s life after WEP’s repeal.
Her Social Security benefits are fully restored, giving her the retirement income she earned through years of dedication. With both her Canadian pension and Social Security benefits intact, Susan can now afford the travel she’s always dreamed of (hello, Europe!), spoil her grandchildren with gifts that aren’t socks, and finally feel that her hard work has truly paid off.
What About Totalization Agreements?
For retirees who’ve worked in multiple countries, there’s even more good news. Totalization Agreements—those unsung heroes of international retirement planning—remain in full effect.
Take Susan’s neighbor, Jack. He split his career between the U.S. and France, never earning enough credits in either country to qualify for benefits on his own. Thanks to the U.S.-France Totalization Agreement, Jack’s work credits from both countries combined, enabling him to receive benefits from both systems.
Before WEP’s repeal, Jack would have worried about how his French pension might reduce his Social Security benefits. But now? He’s free to enjoy his hard-earned retirement income from both sides of the Atlantic. The repeal of WEP ensures that international contributions like Jack’s are respected, making Totalization Agreements even more effective.
The Bottom Line
The repeal of WEP isn’t just good news—it’s a game-changer. By eliminating an unfair penalty, it restores fairness for retirees like Susan and Jack, ensuring that their contributions are recognized and rewarded. With Totalization Agreements making cross-border retirement planning smoother, retirees can now combine their work histories without fear of losing benefits.
So, whether you’ve worked internationally, served as a public employee, or simply planned carefully for retirement, the repeal of WEP is your ticket to financial freedom. Go ahead—book that dream cruise, spoil the grandkids, or finally cross that bucket list item off. Retirement just got a whole lot sweeter.
Closing Note: If you’re curious about how this change might impact your retirement plans or want to explore Totalization Agreements, reach out to a financial professional to ensure you’re making the most of this new opportunity.
About Snowbirds Wealth Management
Gerry Scott is a portfolio manager and founder of Snowbirds Wealth Management, an advisory firm focussed on the cross-border market. Together with Dean Moro and Carson Hamill, associate portfolio managers and with Snowbirds Wealth Management, they provide investment solutions for Americans living in Canada, and Canadians residing in the United States. Licensed in both Canada and the US, they provide tailored investment solutions to minimize the tax burden when moving assets across borders.To schedule an introductory call, please click here.
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