What Happens to Your Pension When You Leave?
She now has pensions from three countries, and she is thinking about Spain.
Picture a woman named Morwenna, 70, who grew up in Manchester. She worked in England until 30, in Toronto for 22 years, then in Boston, where she became a US citizen. She now has pensions from three countries, and she is thinking about Spain. Her daughter Sinead gave her a notepad and said, "One page for each pension."
Morwenna began with the rules for each country, as the pages read on 7 October 2026 describe them. The last row is for a friend's Australian pension.
| Pension | Paid outside the country? | What trims or stops it |
|---|---|---|
| US Social Security, for a citizen | Generally yes; not Cuba or North Korea | Medicare mostly does not cover care abroad |
| Canada, Old Age Security | Only with 20 years in Canada after 18 | A full pension needs 40 years; fewer pay years divided by 40. The supplement stops after 6 months abroad |
| Canada Pension Plan | Yes, worldwide | None found in the pages we read |
| UK State Pension | Yes | Yearly rises only in listed countries |
| Australian Age Pension | Yes, no time limit | Recalculated on residence after 26 weeks abroad |
Her Canadian years gave her 22 out of 40, which is 55 percent of a full Old Age Security pension. Twenty-two clears the 20 years that Canada asks for any payment abroad. A full pension takes 40.
Her friend Cormac, 68, had 18 years in Canada. "I thought eighteen was close enough," he said over coffee.
"The page says a partial pension needs ten years if you live in Canada, and twenty if you live abroad," Morwenna read. "So you would be paid while living in Canada and not in Spain."
Cormac stirred his coffee. "Two years short."
"The page also says time in a country that has a pension agreement with Canada can sometimes count toward the twenty. I could not tell from it whether your years would." They wrote that on his page as a question.
Cormac had a second surprise. His 401(k) payer told him that a US citizen paid abroad cannot choose to have no tax withheld. The US tax agency's page says the same. It also sets default withholding at 10 percent on payments that are not regular and 20 percent on eligible rollovers paid to the person. Morwenna added a line to her own page: the US taxes citizens on their world income wherever they live, so an accountant could confirm how tax paid to Canada or Spain is counted.
Canada also withholds tax on its pensions paid abroad. As of the table we read, dated 9 February 2026, the rate on Old Age Security and Canada Pension Plan paid to residents of Spain is 15 percent, and to residents of the United Kingdom or the United States it is 0. Spain's own taxes on foreign pensions were not researched here.
For the UK, a pension from a UK provider can be taxed in the UK, and a double tax treaty decides which country taxes it. The UK State Pension gets yearly rises in Spain.
You could…
- Make one page for each pension: where it is paid from, what ends or reduces it, who taxes it.
- Write each page's open question and send it to the named office: Service Canada International Operations, the International Pension Centre, Services Australia, or the Social Security Administration.
- Ask an accountant who works with Americans abroad to check the pages against each other, and against your destination's own tax law.
Which pension of yours has a question still open on its page? Tell us below, for someone holding a notepad of their own.
Figures are estimates for planning, based on public data. Rules change, so each figure shows the year it applies to; ask the official office before you act.
Sources: Social Security Administration (ssa.gov/international/payments.html); Medicare.gov travel page; Internal Revenue Service pages on pension and annuity withholding and on plan distributions to foreign persons (irs.gov); Government of Canada pages on Old Age Security and international pensions (canada.ca); Canada Revenue Agency page on non-residents; gov.uk pages on State Pension abroad, tax when you live abroad and transferring to an overseas pension scheme; Services Australia and Department of Social Services Social Security Guide (guides.dss.gov.au).
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