Pension in the USA: size and retirement age in America

Features of the US pension system

The starting date of the pension system is 1935. The amount depends entirely on your lifetime income and working life. Americans are a nation that values ​​success, tenacity and perseverance.

They do not shift all social payments onto the shoulders of the state, but themselves actively participate in the formation of contributions to ensure a peaceful old age.

It is customary for Americans to invest money, forcing it to work and earn interest on the profits. Like a contribution, a pension is inherited rather than transferred to government accounts.

The money for government payments comes from a fund that is financed from the country's debt obligations. According to experts, he collects about $100 billion from interest on the loan. Given America's stable economy, it has funds to support privileged categories of citizens.

How is a pension formed?

The pension system in America has the following structure:

• State - involves contributions by both the employer and the employee, and is the basis for the formation of pension payments.
• Private – involves opening a social account where the citizen himself contributes funds accumulating his pension.
• Cumulative means that a certain organization (state or private), with the consent of the employee, accepts a certain pension contribution, which increases over time and is an additional payment to the main pension benefit.

The state system is formed by contributions paid by working persons to the American Pension Fund. The payment rate is 7.65% for both the employee and 7.65% for his employer. This means the total contribution is 15.3%.

The main amount will go to pension benefits from the state, a small amount will go to medical care in old age. Private entrepreneurs and self-employed persons pay double the contribution.

The funds that a citizen transfers to US private pension funds belong to him personally. Therefore, he decides for himself how much money he intends to save and into what accounts.

The maximum amount of deductions should not exceed 15% of income. This accumulation of funds is not mandatory. A resident of America may not list anything at all.

The private account is called an Individual Retirement account (IRA). The money on it is frozen by the fund until retirement. And if the payer wants to withdraw them, he will have to pay a penalty. If the amount of contributions does not exceed $2,000, no tax is charged on it.

The funded pension is formed by contributions made by the employer to the so-called savings fund. They are also private and public. Their advantage is that they store funds at interest (most often 9% per annum).

The company sets the amount of payments itself. When an American is faced with a choice of which company to give preference to when applying for a job, he will choose the one that pays more towards his funded pension. And the state encourages employers who take care of their employees, providing them with tax benefits.

The procedure for forming a pension in the United States looks the same for both citizens and immigrants. Its essence is the annual accrual of points.

In order for the pension to be accrued, the candidate must collect 40 points (4 for each year worked out of the mandatory 10 years). By the end of each year, the Pension Fund sends out notifications to working citizens about how many points they have already accumulated, how much their potential pension is and how much money is in their accounts.

How is a pension formed in the USA?

The system is built in a special way.

The manual has three parts:

• State.
• Savings.
• Non-state.

It turns out that the state, the employer and the resident himself participate in the formation of payments. When calculating how much a pension is in the USA, you need to take into account your length of service; 1 point (point) is awarded for each quarter. The widow or widower has the right to receive half of the deceased spouse's payments, which will be added to their own funds.

State pensions

The obligatory part is made up of contributions from the employer and employee at 7.65% of the salary on both sides (Defined contribution). It turns out that if an employee receives $1,000, then 76.5 is deducted from the salary and the employer contributes the same amount from his own funds.

There is a limit for mandatory contributions of $65,4000 per year. Not a single cent will go beyond this limit. For American entrepreneurs, contributions are 15.3% of income, that is, they pay both as an employee and as their own employer.

The average amount for the state portion is approximately $1,000. By the standards of the country, this is an insignificant minimum. In many states, this is just a living wage, which is enough to make ends meet.

In the event that the generated amount is not enough to meet the minimum established in the state, the local budget pays up to the required amount.

Non-state funds

In addition to social benefits, every citizen has the right to enter into contracts with non-state funds. It is the account that is opened; it can often be seen under the abbreviation IRA, which stands for individual retirement account. An American puts aside certain amounts for it, the amount of which he himself determines.

If you contribute less than $2,000, it is not subject to taxes. Access to the account opens after 60 years. The moment of accrual of tax on savings occurs at the time of withdrawal; before that you do not need to pay anything to the state. After age 80, the account is closed.

In America it is common to invest. Part of the money goes to the stock exchange to purchase assets and securities. Turnover helps to get a percentage of profit. In 2021, despite all the circumstances, the investment trend has continued.

Private companies may go bankrupt. Force majeure is covered by state insurance. The country's budget guarantees significant compensation for lost finances. If you manage it wisely, then in old age an American will receive good dividends.

Cumulative part

The last part is cumulative. It is understood that a person has the right to save money in a personal account. Voluntary savings are not taxed. An elderly person simply uses a savings account and withdraws the necessary amounts. There is a caveat: if you withdraw money before the due date, you will have to pay tax.

As a result, the size of the pension in the United States depends on the guaranteed state portion and on the citizen’s civic position. Americans are an enterprising people.

It is completely normal for them to become investors and save money whenever possible. The funded part can be financed by employers, then they receive tax benefits as an incentive from the state.

The population is provided with a pension in the United States, the size of which allows them to maintain a decent standard of living.

Retirement age in the USA

Let us emphasize once again that in the future we will talk about the first type of pension - state old-age insurance. Retirement in the United States typically occurs at age 65 for both men and women.

At the same time, US citizens retain the opportunity to retire early at age 62, however, in this case there are a number of nuances.

First, you will need to write an application, which must state the reason for your desire, and then submit it to the pension fund.

Secondly, the pension will not go to you in full, but only 70%, and even when you turn 65, the amount will remain that way.

There is also another nuance: for those people born before 1954, the age is always 65 years old, and for those born later, the age increases every year (maximum - 67). The latter phenomenon is associated with an increase in life expectancy in America: in 2015 it is already 78.74 years. For comparison, in Russia it is 70 years.

According to statistics, the average age of men retiring in America is 67 years old, and women - 65.

Pension size in the USA

The benefit amount depends on several different factors:

• state;
• cities;
• salary level;
• type of activity;
• length of service

An American with a permanent position can count on payments of up to 44% of his salary, this will ensure a comfortable life. If he has worked for less than 10 years, then social benefits are assigned. You can leave before the official deadline. The benefit will then be 100% if your income is less than $1,5720 for the year. If this amount is exceeded, a coefficient of 0.5 is used.

The main differences between the US pension system and post-Soviet ones

In the former CIS countries (Russian Federation, Ukraine, Belarus), pensions are formed from only one source - from contributions to the country's pension fund while you are working.

In the Russian Federation, a reform is being carried out in 2021 with the aim of dividing pension payments into 2 components: funded and insurance.

As of 2021, the retirement age in the Russian Federation is 60 years for men and 55 years for women. In June 2021, a bill was passed to raise the retirement age to 65 and 63 years, respectively. Considering the average life expectancy of 70 years for men and 80 for women, it turns out that the average Russian citizen will be able to live on state support in the near future for no more than 5 years.

To receive a pension in the Russian Federation, you must work for at least 5 years officially (as of 2015), with a subsequent increase in this indicator to 15 years in 2024. In the United States, you can request Social Security retirement benefits based on at least 10 years of contributions to the specified fund.

On August 28, 2021, the President of Russia made a statement about his intention to leave the retirement age for women at 60 years (instead of the previously stated 63 years). For now, the statement is of a recommendatory nature, since the draft in its original form has already passed the first reading in the highest legislative body of Russia.

Ukraine is also undergoing a reform of the pension system, but the changes relate for the most part not to the retirement age, but to the size of the minimum work experience. Thus, with the retirement age of 60 years for citizens of the country of both sexes, only those whose work experience is at least 25 years can request pension payments starting from 2021. By 2028, this value will increase to 35 years. All those whose work experience will be less than 15 years upon reaching the age of 65 will not receive pension payments from the state. Instead, the program provides for the payment of social benefits.

Complete comparative analysis of pension systems

Infographic Modern Infogram

The analysis shows that the pension system of post-Soviet countries still needs improvement. The table uses the AgeWatch index as one of the indicators, which is needed to display the standard of living of older people in countries around the world. The lower the number, the higher the standard of living. It is significant that in the USA the AgeWatch index for 2015 was 9, in Russia – 65, and in Ukraine – 73.

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Average pension by state

On average, the amounts are $1300 – 1400. The pension is considered a source of income and is therefore taxed. The average rate is 30%, the final value depends on the state. Traditionally, it is lower in the South, which is why there is a migration of retirees to California, Florida, and Hawaii.

For example, a New York resident must pay federal, state and city taxes, so the minimum payment here would be $821. Whereas in Texas and Florida there are only federal payments, and you can get more in your hands.

Utah, Kansas, Nebraska, Massachusetts and Vermont traditionally rank among the slowest states to retire due to low payouts.

What can the average American expect, depending on qualifications and experience:

• No length of service or experience - $300;
• Short experience, on average up to 10 years - $600;
• Simple blue-collar jobs, average income - $750;
• Highly qualified personnel - $1500;
• Military, teachers, doctors, firefighters, officials, police - $3,000;
• President = $16,000.

The privileged group traditionally includes professions whose representatives save, teach, heal, and protect. High-level specialists are much more expensive.

Pensions in the USA were compared with Russian ones

Retired people in America are respected people. Without any irony. There are many of them - about 55 million out of a total population of 332 million. They actively vote, so politicians try to win them over. Their money has a significant impact on the US economy, which is critically dependent on consumer demand. In today's economy, pensioners are also in demand as a labor force - if not in their previous profession, then as department store salespeople, call center workers, statistical data collectors... Where it is necessary to look for an approach to people, “senior citizens”, as they call them called in America (“senior citizens”), they often show more skill and patience than young people.

But should American retirees strive to work when they reach retirement age? The question is ambiguous. Let's compare the details of the American pension system with the Russian one, the nuances of which are known to our retired readers.

When to go on vacation - earlier or later?

One in five retirees in the United States works. The vast majority are due to necessity: otherwise you won’t make ends meet. But there are also those who simply cannot and do not want to stay at home, although their budget allows it. These take any job that is available and feasible, and work until they stop working - until they are fired or until they become completely decrepit or go to another world. There are many of them: Americans are workaholics, they are raised this way from kindergarten. Plus loneliness: children and grandchildren have grown up and scattered to different parts of the country...

The retirement age in America is, depending on the year of birth, from 66 to 67 years, gradually increasing over the months. (The oldest pensioners born before the war had a retirement age of 65).

The later you were born, the higher your retirement age, the later you will be able to join the glorious ranks of “senior citizens” with all the benefits due to them. However, the main pensioner benefit - state health insurance Medicare - is given to everyone over 65 years of age. The importance of this benefit is determined by the fact that the United States does not have universal public health insurance, which is available in other developed countries. Approximately 20 million Americans do not have health insurance.

But the full old-age pension can be received only upon reaching a specific pension mark established for a given year of birth - with a gradual increase from 66 to 67 years. For example, someone born in 1959 or even January 1, 1960 will receive a full pension upon reaching age 66 years and 10 months. And anyone born on or after January 2, 1960 will be entitled to a full pension at exactly age 67.

On this occasion, my friend Danny Burton from Maine, who was born, as he says, in the early morning of January 2, 1960, joked: “If my mother had known that our authorities would come up with such a dirty trick, she would have tried to give birth to me the day before, on New Year’s Day.” so that I can start milking the social insurance cow two months earlier.” Danny would like to retire as soon as possible for a well-deserved rest, but, as they say, “sins do not allow”: his salary is modest (manager in a small company), his pension looks rather frail, and he plans to work not only until he is 67, but also later - as much as health allows.

US citizens and permanent residents who have reached full retirement age can work while maintaining their salary and full pension (which, I note in parentheses, is indexed equally for all pensioners - working and non-working). But “early retirees” are allowed to earn, without deductions, no more than a certain amount in addition to their pension - it changes annually and this year is $18,960 per year.

What are these “early retirees”? The possibility of early retirement - at 62 - exists for anyone who has worked for at least 10 years. This length of service is required to receive any, early or late, old-age pension. The pension amount is calculated depending on earnings throughout your entire working life. An early, 62-year-old retiree loses 25% of his earned pension, and he loses it not temporarily, but forever. This option is resorted to by those who are prevented from continuing to work by health, family circumstances or... unwillingness to have a larger pension.

Which is better - more or less?

Paradox? Yes, but he has his own explanation. Let's figure it out in order. Everything mentioned above applies to the state social insurance pension Social Security. Along with the social insurance pension in the United States, there are (or rather, more and more rare) private pensions paid by the company where the “senior citizen” previously worked. State employees and military personnel receive special pensions.

Is a private or state pension combined with a regular social insurance pension? In most cases, yes. If your employer - a private company or a government agency - withheld Social Security taxes from your paycheck, you will have both.

The Social Security fund is formed from two sources: 6.2% of the employee’s salary is paid by the employee himself and the same percentage of the salary paid to him is paid by the employer - a total of 12.4% of the salary fund. By the way, the Medicare health insurance program fund is financed in a similar parity way: contributions in the amount of 2.9% from the salary fund are financed in half by the employer and the employee - each contributes 1.45%.

Both Social Security and Medicare benefit retirees not only for age but also for disability. They are also paid in the event of the loss of a breadwinner who received a pension, or if the spouse of a currently living pensioner has not earned a pension themselves - such spouses are paid approximately half of the pension of the pensioner-spouse, for a total of one and a half pensions for both.

Let us return, however, to the paradox of not wanting to earn a larger pension. The fact is that the Social Security pension in America (it appeared in 1935) was not originally intended to be the only or main source of income for a retiree, and it is not enough to live on even when combined with the pension savings that most Americans spend their entire lives.

As of 2021, approximately half of those retiring do not have enough money to live on. And when retirement age approaches, many, to their chagrin, realize (either on their own or with the help of a financial advisor) that living on a pension and savings is unrealistic. The only possible way out (apart from leaving the United States for some cheap country like Panama or Costa Rica, where you can “walk around the buffet” with an American pension) is to receive benefits from the state intended for the poor.

But becoming “poor” is not so easy: those applying for this title must show the social security agencies an absolutely minimal income and the absence of any significant savings. Therefore, financial advisors often advise future retirees to follow the path of “elegant impoverishment” and get rid of almost all their money in one way or another before retirement. Then it will be possible to show the state empty hands - here I am, in need, help! And, accordingly, it will be possible to qualify for subsidized housing, food assistance, a pension supplement for the poor, free medicines, and “free” health insurance for the poor (Medicaid).

Photo: pexels.com

Russian-speaking compatriot David from Philadelphia describes the metamorphosis that happened to him this way: “When I approached 62, I realized that they were about to put me in a position in which it would be very uncomfortable. And I decided that it would be better if I put them, that is, the state, in this position. That’s why I retired early – so that it would be smaller. All the money that had accumulated was spent, invested, shoved here and there - and here they are, empty hands! Now I live in retirement more or less like a person, I have enough to live on.”

The choice is between fear and hunger

Let me make a reservation right away: here we are not necessarily talking about some kind of illegal fraud - there are many completely legal ways to “become elegantly impoverished.” For example, to reduce savings, you can completely pay off all debts on your mortgage, car loan, credit cards, etc.

You can pay funeral expenses in advance and buy a place in the cemetery. You can pay a life annuity for your spouse. You can pay in advance for home care services for an elderly person. And, most importantly, you can, if you have the money for it, buy a house or apartment.

When assessing the assets of an applicant for the “poor social welfare”, the main housing is not taken into account - be it your own home or something smaller. The house may not even be cheap - you have the right! America is a country of homeowners, with the majority of the population living in their own homes. However, if you already have your own home and you want to invest money in a second house or apartment, this will no longer “fail”, it will be counted as your assets and will not give you poverty benefits.

Of course, it is not always possible to “become impoverished elegantly” without breaking the law. It is extremely difficult to fit into the Procrustean bed of government poverty criteria, and without fitting in, a huge number of people fall between two chairs - they are not rich enough to live on their own money, and not poor enough to receive help from the state. Therefore, many people, faced with the dilemma of “law-abiding or survival,” choose the latter.

Here is an example that my friend Maria told me about: she lives in New York and, in order to make ends meet, receives both an American and a Russian pension in full. “To avoid deductions here or there, you have to use a default figure,” she says. “And about my apartment in Nizhny Novgorod, I also have to keep my mouth shut - otherwise there may be difficulties, they count any foreign assets here and want to take taxes from them into the American treasury.”

By the way, only two countries strive to do this: the USA and Eritrea. Others proceed from the fact that if, say, a Finn living in America earned money there and paid tax on it in the USA, then in Finland it is unlawful to take another tax on this earnings.

In general, it’s like this: if you want, your teeth will chatter from fear; if you want, your teeth will chatter from hunger.

Old age in facts and figures

But let’s not exaggerate: in general, American retirees not only survive, but live, and not bad. But this is mainly thanks to the Social Security fund, which, even if it cannot fully feed all retirees, is still the most significant help. This fund is now in danger of being depleted: according to expert estimates, its funds will run out somewhere in 2032 - 2035 - exactly in time for the centenary of Social Security. Unless, of course, lawmakers pass something within the walls of the Washington Capitol that will quickly fill retirement coffers.

Photo: pexels.com

The problem of depletion of social insurance finances caused by the aging population and the growing proportion of pensioners requires a solution by raising taxes. But in the US, anti-tax sentiment among the population and politicians is extremely strong, and it is extremely difficult to push any new tax through Congress. Right-wing conservative figures talk about the need to privatize the pension system, but these ideas do not find support among voters. Social Security has become an untouchable “sacred cow” in America, which is why all presidents, Democrats and Republicans, promise to preserve it. But it’s not enough to say – we have to do something...

In the meantime, the pension situation in dollar terms looks something like this. The average annual income of an American family of retirees over the age of 75 last year was $58,644 for two. For the 70-74 age group, the figure was higher: $79,344. For 65-69 year olds, it was $88,291.

Single retirees had significantly lower annual incomes—$36,491, $45,478, and $49,265, respectively. You might say, “That’s not sour either!” Nominally yes. But if you take into account the income tax that must be paid on some part of this income, as well as rent (from $1000 per month for the cheapest housing in the deep provinces and higher, much higher in the capitals), extortionate property taxes in the case of home ownership, and by no means cheap insurance , it will turn out quite “sour”. And it will become clear why many choose the path of “elegant impoverishment” or, at a minimum, sharply reduce their standard of living after retirement, moving, for example, from their own home to a rented inexpensive apartment, downgrading their car, etc.

But many do not give up - they save money all their lives through pension plans, which are available in many companies (both the employees themselves and their employers contribute money to such plans), as well as by purchasing pension time deposits and other banking instruments. All money invested in retirement savings is tax deductible. Pension savings cannot be touched before you turn 59 and a half years old - otherwise you will be charged a penalty.

And yet... Financial advisors in America say: for a normal life in retirement, you need to save an average of a million to one and a half dollars. And, to put it mildly, very few people succeed in becoming a dollar millionaire.

Read the material “Real pensions in Russia decreased for the first time in five years.”

Preferential benefits

Some citizens have the right to receive benefits and support. Old people are given money for food, public canteens are opened, which exist at the expense of charitable foundations. In private cases, the state budget helps pay for utilities.

When people retire in the United States, single people have the opportunity to go to a state nursing home. Judging by the reviews of Americans, they are not inspired by this prospect. If your own savings are not enough, you can count on help paying for home visits from a health worker.

A bus is sent to apartment buildings to collect older people for trips to the store and back. Disability benefits are provided.

Given the turnout of voters, state authorities are meeting the wishes, but such additional measures do not exist everywhere.

Social Security System for Retirees in the United States

Despite the fact that the average pension in the United States is less than in leading European countries, the country has a well-developed system of social protection for people of retirement age. However, specific measures vary from state to state.

In general, each state has its own subsistence level, so if a citizen’s pension is less than it, then he is entitled to an additional payment from the local budget. also has a program to provide food to the poor.

Pensioners receive special cards from which they can only spend money on groceries. There are also other programs related to receiving significant discounts on rental housing, benefits for housing and communal services, taxes, etc.

At what age do Americans retire?

The system has no concept of the exact number of years after which a person is guaranteed to receive benefits. The age from 62 to 70 years is considered the retirement period. A citizen has the right to leave earlier, but payments are reduced by 5 - 7% for each deducted year.

Some of the population can leave earlier legally without deductions. If you don’t leave, then the payment grows by 8% every year. A financial bonus encourages you to stay at work and lead your same lifestyle.

Income level of American retirees

The conditions of the pension system in the United States are such that after retirement, Americans receive about half of their earnings during their working life. In fact, the average pension in the States varies between 1100-1500 dollars per month. Of course, there are categories of citizens whose pension is above average. These are teachers, firefighters, police officers, etc. The pensions of residents of megacities, where the standard of living is generally higher than the national average, also differ in size. Thus, annual pension payments, for example, in New York amount to more than forty thousand dollars per citizen.

There is also a lower limit for the size of the pension, upon reaching which an elderly American is included in the social income program and receives an additional payment from the state until the minimum allowable amount is reached. So, last year the acceptable minimum was $733. Thus, if a citizen is entitled to a pension under the pension program in the amount of $400, then the state will pay him an additional $333 as part of social income. The way in which the quality of life for older citizens is organized in this country creates a completely positive attitude of a person towards such a concept as retirement age. Retirement in the USA is not perceived as support for a person in his declining years, but rather as a new opportunity, a new stage in life.

Special cases of early care

Military personnel only need 20 years of service to qualify for benefits. Wounds and injuries are considered a valid reason to leave even earlier than this. Police officers have different requirements: at least 55 years old, at least 20 years of experience.

Other categories of citizens can retire at the age of 62 upon a special application.

In what cases is it possible:

• enough money has been saved for a secure old age;
• work involves heavy physical labor;
• the specialty is under constant mental stress;
• employer initiatives that set corporate standards for care.

For the category of poor citizens (income less than $15,000 per year), 100% of the required benefits are paid.

When Americans retire

There is no single indicator when it comes to output. The exact period depends on the age group.

Gender issue

Legislatively, the time of retirement is no different for both sexes. However, statistics show the following data: women prefer to retire at 65, and men at 67.

Special cases of early care

US citizens are also allowed to retire early - this can be done at 62 years of age. Usually, for such a step it is enough to write a special statement justifying the reasons. But such a measure is not popular - in this case, a person will receive only 74% of the allotted amount. And this figure will not change even after reaching retirement age.

There is an exception to this rule - 100% payments are due to a person from the poorest segment of the population earning less than $15,000 a year.

Usually they do this:

• people fired by their employer;
• those who engage in heavy physical labor;
• citizens with sufficient savings.

US military and police pensions

Average pensions in the United States for military personnel are 50% of wages. Supplements of 2.5% are provided for each year of well-deserved retirement. The military is also provided with additional benefits from the state.

Sergeants, pilots and sailors earn between $780 and $1,770 per month. For junior lieutenants, from 2370 to 5300. In addition, for senior officers, amounts start from 5000 and can reach 17500.

It is logical that in order to receive significant benefits, you must be of at least the rank of colonel. Although if you convert it into rubles, you get impressive sums even for ordinary soldiers.

Police benefits are also considered half the salary. According to statistics, a police officer from New York who has honestly completed his required length of service is entitled to payments of about $53,000 per year.

What is the average pension in the US in 2021?

The average pension per month in America is 1300-1400 dollars (in rubles the benefit is more than 85 thousand). If you pay attention only to this indicator, then the pension benefit in the United States is several times greater than in the CIS countries, but less than in some European countries.

However, older American citizens can afford more than citizens from European countries. The United States also provides many benefits for retirees.

But benefits can vary greatly depending on the state, the retiree’s specialty, his length of service and salary:

• The lowest pension of $300 is received by persons who do not have the proper experience and length of service.
• Citizens who have worked officially for a short period of time receive payments of $600.
• A significant portion of employees with an average salary receive $750.
• Qualified specialists who received good wages can hope for $1,500.
• Veterans, military personnel, police officers, officials and teachers can receive up to $3 thousand.
• The monthly benefits of retired American presidents exceed $16,000.

However, assigning a certain benefit amount does not mean that the pensioner’s entire monthly income will be $300 or $600.

In America there is a guarantee of earning a fixed minimum pension. The minimum pension in the United States in 2021 is set at $733 per person, 1100 for a married couple. If the pension is assigned in a smaller amount than it should be, you can write a statement and ask that the benefit be increased to the maximum value.

US Presidential Pension

The key figure of the state is under special treatment. Barack Obama increased payments to former presidents by 17.9% in 2021. The prudent step resulted in payments of $205,000 annually for him. This is exactly what the former head of state receives now.

In addition to benefits, the budget covers the costs of technical and administrative personnel, mail, transport, food, and provides security for 10 years from retirement. By 2021, the annual limit on team maintenance expenses has been set at $96,000.

The former president and members of his family, in accordance with a special order of the Minister of Defense, can enjoy the right to free treatment in military hospitals.

How do retirees live in the USA?

The country has a well-developed system of public and private pension funds. Often, a typical retired American is a person who receives 2 or 3 payments from different sources. Large companies create their own funds for contributions.

As a result, an American can devote his free time to his favorite hobby, grandchildren, and travel. Considering what pensions are awarded in the United States and the difference in the cost of living in different countries, elderly American couples have become desirable tourists.

How Russian pensioners live in the USA

Usually, the question of what kind of pension is in the USA is asked by people planning to move to permanent residence. It should be remembered that the country is characterized by strict adherence to rules.

You must be an immigrant with a green card, then you can count on a comfortable old age. But according to general impressions and reviews, conditions will always be better for local residents.

The benefit is based on the principle: work and accumulate points. Then, at the age of 67, with 35 years of work experience, you can apply for full payments.

After obtaining citizenship, a newly minted American can bring his parents. They will have the right to American benefits. Migrants over 50 years old receive the minimum. Among this category there are often people who do not quit their jobs until their death.

Russian pensioners retain the right to receive payments from their homeland. You will need to apply for a card with the function of withdrawing money abroad. Cash can only be received from a bank in the Russian Federation. Every year, a notification is sent to the Pension Fund through a notary or consul, confirming that the person is alive.

Russian elderly people in America live a little worse than native Americans, but they do not complain. There is enough income for theaters, cinema, utility bills, nutritious food and medical services. They are given benefits entitled to citizens on a general basis. Compared to Russian realities, emigrants settled down with dignity.

Retirement age in America

In the USA, the concept of “retirement age” does not have such a specific and fundamental meaning as in Russia.

At what age do US residents retire? As a rule, people retire much later than in our country, as is often said by supporters of raising the retirement age in the Russian Federation. At the same time, one cannot ignore the objective fact that the life expectancy of American citizens is significantly higher than that of Russians. Moreover, it is growing at a fairly rapid pace, which undoubtedly creates the need for some changes in it in the future, which is already being debated in American society.

In general, the general retirement age in the United States is 67 years old. However, its achievement is not a mandatory factor for receiving financial support. You can go on vacation between the ages of 62 and 70 under various circumstances.

This largely depends on the year of birth. Thus, all citizens, without exception, who were born before 1937, began to receive a pension at 65 years of age. Subsequently, for persons who were born between 1937 and 1955, the retirement age increased, but very gradually - 2 months per year. Those who were born in 1956 or later retire at age 67.

However, Americans have the right to retire early - at age 62. This requires compelling reasons, which include:

• difficult and difficult working conditions;
• dismissal at the initiative of the employer;
• availability of sufficient pension savings.

Early pension is paid on the basis of an application received from the employee, however, it should be noted that it will not be calculated in full, but in an amount equal to 74% of the amount that the employee would have received if he had retired at a later age.

Attention! US citizens who have an income of less than 15 thousand dollars a year have the right to apply for an early pension and receive it in full.

In addition, Americans can continue to work after reaching age 70. In this case, the amount of their security will increase quite significantly.

Unlike Russia, there is no difference in retirement age between men and women. At the legislative level, it is 67 years for everyone . However, according to available statistics, if men do go on vacation at this age, then women stop working a little earlier - at 65 years old.

Disadvantages of the US pension system

The period 2021–2021 showed the likelihood that the pessimistic forecast will come true. Analysts have repeatedly predicted the collapse of the system. The problem is that the baby boomer generation is retiring. This is a large and active group of people who have worked for many years, supplying the budget with contributions.

The sharp rise in unemployment due to the coronavirus pandemic has placed additional strain on funds. The pension fund has become a moneybox from which funds are taken to solve specific problems and plug financial holes.

Americans will most likely face an increase in the retirement age, a reduction in benefits, and a reduction in benefits. Retirement in the United States in 2021 could cause unrest and popular discontent.

When do they retire?

There is no single retirement age, but to receive a full state pension a person must be 67. Benefits can start to be paid earlier at 62, but then the amount will be reduced by 25%.

At the beginning of each year, every working person receives a notification from the pension system with individual data. It contains the following points:

• work remains to be done before the benefits are assigned - indicate the amount;
• the amount of payments will be - write down the number.