My question is regarding the scenario if I apply for my Canada pension when I am eligible at age 65 but wait to apply until 70 to apply for my US social security. My CPP is for a very small amount - annual approx. $1,600 I do not have enough substantial income to eliminate WEP on SS. Will the WEP for social security at 70 be calculated based on when I start receiving both pensions at the same time at age 70 or will it back date somehow to factor in the CPP benefits I received from ages 65 to 70?
Any reduction in your U.S. Social Security benefit rate resulting from the Windfall Elimination Provision (WEP) won't be applied until you start drawing your benefits. Even then, the WEP reduction would only be applied if you're already drawing your Canadian Social Security pension at that time. The WEP reduction, if any, will simply lower the amount of your monthly U.S. Social Security benefit rate when you start drawing your U.S. benefits. You won't be docked retroactively for any past years that you've drawn your Canadian pension, no matter when you started drawing the Canadian pension.
Based on the amount of your expected Canadian pension, it sounds like your U.S. Social Security benefit will almost certainly be calculated using the WEP guarantee method. That would basically limit the amount of reduction applied to your U.S. Social Security benefit to no more than 50% of the amount of your Canadian pension. The actual WEP guarantee formula is more complex than that, so the actual difference in your benefit rate caused by WEP probably won't work out to precisely 50% of your Canadian pension amount. Our software is programmed to handle all WEP calculations, so you may want to strongly consider using it to do your Social Security planning.