What are the Benefits of Retirement in the United States?

The United States’ social welfare is not the best among the Western countries, but its social security system is the largest one in the world. More than 90% of U.S. workers receive social security benefits after retirement. According to the law, every employee can receive pension from the federal government every month after retirement, provided they have been working for a certain number of years.

1. Social Security Income

One of the main sources of income after retirement comes from the government's monthly social security income.

The retirement age in the United States has been retired from 62, the normal retirement age is 66 and the retirement age is 70. If you have a cumulative ten-year (uninterrupted) tax return in the United States, you will be eligible to receive a government social security payment upon retirement. The amount of social security money varies from $845 to $2,640 per month based on your annual tax return (this amount increases by about 3% per year based on the inflation rate you count).

The age of early retirement starts with retirement at the age of 62 and will receive 75 per cent of the amount received each month for regular retirement. Choose the late retirement age of 70 years old to start receiving social security, monthly can receive the normal retirement age of 132%.

2. Company Pension Account

Another source of income is the company, which provides company pension accounts with company executives and full-time employees (Define Contribution Plan, such as 401k. Define Benefit Plan, such as Pension).

There are three main benefits to the pension account set up by the company:

The company provides an annual subsidy of 3% to 12% of annual revenue or more. The company subsidizes 3% to 12% of the annual income of its managers and employees each year. For example, if an employee earns $50,000 a year, the company will put $1,500 to $6,000 a year into the employee's retirement account as a source of income for the employee's retirement.

Employees may also choose to put a portion of their income in the company's retirement account. The money put in is not subject to personal income tax, and the investment profit spent no tax. Only upon receipt of retirement are paid at the rate at the rate of retirement.

Even in the event of a company's collapse or job change, there will be no loss of money in the company's pension account. The money will not be lost to anyone in the event of a legal dispute that requires compensation. That's why many doctors choose to start collecting money from 401k two years after retirement, because there is a two-year appeal period and two years after the patient is not at risk of being appealed for a medical accident two years ago.

3. Personal Pension Account

The third source of income is an individual's pension account (IRA, Roth IRA).

Compared to the company's pension account. In addition to the 3% to 12% less of the company's 3% to 12 per cent benefit, the individual pension account enjoys the same benefits as the pension accounts given by the company.

4. Annuities

Annuity is also an insurance type, an insurance company that creates a wealth management product that generates a fixed income after retirement, in order to protect investors from living too long and saving less than enough to live in the future.

Annuities are divided into two types: immediate annuity and deferred annuity.

First, a spot annuity is the beginning of the year when you put your money into an insurance company's annuity account, and the insurance company will pay you a certain % payout ratio each year from the money you put in, depending on your age. For example, the payout ratio in their 60s is about 6% a year and the 70-year-old is about 7% a year.

The length of the pick-up length of the spot annuity:

One scenario is to pay to die, which means that if your payout ratio is 7% and you survive 10 years after you buy the contract, you only get 70% of the principal, and if you survive 20 years, you get back 140% of the principal, the longer you live.

Another scenario is that the insurance company's contract says it's clear how many years you can take, and if you die before that, the rest of the years will be taken by your Spouse or your child. For example: the period certain in the contract is 30 years, your payout ratio is 6%. Then you can get 180% of the principal in 20 years. If you die in 30 years, the remaining years will be taken by your spouse or children. More suitable for the combination of old husband and wife.

In another case, the couple buys together, and gets to the end of both spouses' deaths. For example, if a husband and wife are insured, payout ratio 7%, one of the spouses dies 10 years later and the other after 30 years, the family can get a total of 7% x 30 x 210% of the principal in 30 years. This extraction method is more suitable for the combination of old husband and wife.

A spot annuity is more suitable for older people (because the older you get, the higher payout ratio) or a combination of old wives and younger wives.

A two-term deferred annuity is when you give your money to an insurance company that guarantees that your principal will grow by 5% to 7% a year, but the insurance company stipulates that you can get the money out of it after a specified number of years (usually 7 to 10 years). When you take the money out, the contract dictates how many you can take in a year (say 5% max withdraw).

For example: 10 years ago you put 200,000 in an insurance company's annuity, growing 5% a year, and after 10 years you can withdraw 5% of the principal from your policy each year and 5% of the growth portion (about $16,000 per year) for a total of 20 years, and a total of $320,000 in 20 years.

Extended annuities are more suitable for those who retire with 10 years to go (52-57 years old). But it's not for people over 66.

There are many things to note about an individual's annuity, the most important of which are:

a. The length of the contract for an annuity. The longer the contract length, the harder it is for the money you put in to get out. Take a column: 5 years of contract length and contract length of 15 years of annuities. Annuities with a five-year contract can be taken from them five years after the contract is signed. A 15-year contract can take up to 15 years before taking money from it, and there are a lot of fines if you withdraw it early. Therefore, in the choice of annuities when the length of the contract generally choose between 5 and 10 years of contract is more ideal, more than 10 years of contractneeds need to be carefully considered.

b. What is the maximum percentage of the contract to be withdrawn from the contract each year after the expiration of the contract. Some annuity contracts are marked at 4% in unobactive places. If it's 4%, it's going to take 25 years for your money in your annuity to get it all out. If you want to shorten the time to withdraw money, you will attach a certain amount of fine.

c. Fixed annual growth of principal - the annual cost of the contract - the actual growth of the principal in the contract. When choosing to purchase an annuity, take a closer look at the annuity contract and see what you need to be aware of in the a. b. c. listed above.

5. Medical Security

There are companies or individuals who are responsible for employees or their own health care before the age of 65, and responsibility for your health care will be transferred to the government after the age of 65. After paying a small monthly cost of health care, you'll get health care from one of the best health care systems in the world.

It is worth noting that at the age of 65 it is important to remember to apply to the government, after the time there will be a fine, and a lifetime fine.

Another point is that even one of the best health care in the world, in the United States, there are only 90 days of long-term care, more than 90 days is to cover the full cost of care