Monday, 4 February 2019

How do retirees live in the USA




The US pension system does not sparkle with the uniqueness of its structure. It is standard and stable, consists of numerous public and private funds. It’s different from ours: the pension system is developed at such a high level that with a good salary a person is able to save up even 2 or 3 pensions.

Retirement age


Retirement in the United States in 2017 is similar to last year - approximately 66-67 years, depending on the age group. The scale is as follows:

For those born before 1937 inclusive, the retirement age - from 65 years, for those born later, it gradually increases.


People born in 1955 and younger, can retire, reaching 66 years 2 months.


Such a gradation arose because the life expectancy in the country has increased.


The early retirement age - from 62 years old inclusive. Anyone who so desires is required to write a statement and indicate the reason for their decision. But there is a nuance: the social pension will be only 70% of the accrued, and this amount is saved for life. That is, it will not grow to 100% with the onset of retirement age.


On average, American women retire at 65, men - at 67.

Who is eligible to receive a pension in America?


By working legally and donating money to the state budget for a pension fund, every resident of the United States earns his pension for 10 years.

The principle of accrual of the state pension (social security) is similar for both immigrants and indigenous people. For 1 year of work (legal, with payment of taxes) 4 so-called points (credits) are charged. To earn a pension in the US, you need to get 40 points - that is, to work at least the already mentioned 10 years.


Americans carefully monitor the formation of their retirement. At the beginning of each year, a legally working person receives a document from which he learns:

  •  How many credits are accrued at the moment?
  •  Is there a pension and what is its size, based on the duration of work and salary.
  •  If it has not yet been accrued, then how many years must be refined, and how much allowance should be expected in potential.
  •  Additional information: how to get a pension, the rules of accrual.

In addition to social, most Americans have additional, accumulated pensions. Each large company has a separate pension fund. Here workers deduct a certain part of the salary, which is not taxed and just constantly accumulates on their account. The company simultaneously adds its share (usually 10-15%, the most successful firms - even up to 50% of the employee’s investment amount).


With the onset of retirement age, the accumulated amount often exceeds social security.

Social Security Programs in the USA


Older Americans, for the most part, live well, even if they have never held particularly high positions. This is largely due to the large pension programs (there are more than 700 thousand).

In America, there is a program for the poor (SSI), which helps out in cases where the amount accrued by the state is lower than the subsistence minimum. Under the terms of the program, each participating pensioner is additionally paid a certain amount, which is lacking to a minimum. In each state its size is different. In California, for example, it is 980 dollars.


The accrual principle is as follows: if a person’s social security amount is $ 500, and there was no private pension fund at work, then the program for the poor earns another 980-500 = 480 dollars a month. This often happens with citizens working on a small salary, when the social pension is only $ 500-600.


There is another popular one - the so-called “Eighth program” for low-income retirees. By registering in it, you can get a voucher that allows you to pay for rental housing in specially provided complexes only 25-30% of the total income of the pensioner.


To become a member of this or another pension program, you need to contact the Social Security Service.

Pensions in the USA


The minimum social pension per citizen is $ 800, for a couple of spouses - $ 1,100.

The maximum pension benefit that the state can charge is $ 1,800.


On average, in all states, the state-accrued pension amounts to $ 1,200–1,300.


Here's what's important: thanks to social security in America, the value of social workers for the country is clearly visible. Police, military, teachers, firefighters, officials receive very high benefits.


Even receiving $ 1,000, the retiree can live quite comfortably and be provided in the US, eating and dressing in low-cost stores, participating in the housing savings program. Many even successfully postpone for travel then most of our grandparents cannot boast.


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