What benefits can American elderly immigrants enjoy in 2020?

More and more domestic people immigrate to the United States to provide for the aged, so what is the pension system in the United States? This is probably a topic of interest to many people. Let's see what benefits the elderly immigrants in the United States can enjoy in 2020.

What is the pension system in the United States?

The endowment insurance system in the United States has a history of more than 200 years. After long-term development, the current pension insurance system is mainly composed of three pillars: the first pillar is the government-led and compulsory social pension insurance system, that is, the federal pension system; The second pillar is the enterprise-led supplementary endowment insurance system, which is funded by both employers and employees, that is, the enterprise annuity plan; The third pillar is the personal savings pension insurance system, that is, the personal pension plan, which is responsible and voluntarily participated by individuals.

These three pillars, commonly known as the "three-legged stool", play the roles of the government, enterprises and individuals respectively, complement each other and form a joint force to provide multi-channel and reliable old-age security for retirees.

I. Federal pension system

The federal pension system is a basic pension insurance system led by the government, and it is a guaranteed social welfare provided by the American government for retirees. Details are as follows:

(1) Paying social security tax

Social security tax is the core of the federal pension system. Social security tax is the second largest tax in the United States after personal income tax. It is uniformly collected by the federal government nationwide according to a certain proportion of wages, and enterprises are forced to withhold and pay wages according to employees' social security numbers (SSN) every month. After the social security tax is collected by the domestic wage bureau of the US Treasury, it will enter the social security fund set up by the US Social Security Administration, the pension insurance management agency.

(2) Social security tax rate

The social security tax rate is dynamically adjusted by the social security department and implemented after approval by the National Assembly. The adjustment is based on the forecast data of population aging and the needs of pension expenditure. For example, the social security tax rate is 10. 16% of employees' wages at 1980, and it is increased to 12.4% at 1990. Since 1990, the social security tax rate has not been adjusted. The social security tax rate for 20 15 years is 12.4% of employees' wages, and employees and employers pay 50% respectively. That is, employees and employers each pay 6.2% of employees' wages; For self-employed, it is 12.4% of salary.

The federal pension system encourages "saving more social security tax at work and receiving more pension after retirement". Employees with higher wages pay more social security taxes and receive more federal pensions after retirement. At the same time, in order to reflect social equity and prevent a very small number of retirees from receiving too many pensions, the social security tax has set an upper limit of taxable wages, and the part that exceeds the upper limit of taxable wages will no longer pay social security tax. The upper limit of taxable wages is adjusted year by year with the changes of prices and wage levels. For example, in 2006, the upper limit of taxable salary was 94,200 USD, which was raised to118,500 USD in 20 15 years. Accordingly, in 20 15, employees can pay the social security tax of146.94 million USD at most (1.85×12.4%).

(3) receive a federal pension

According to the federal pension system, employees must pay taxes for 40 quarters (equivalent to 10 years) in order to receive the federal pension every month after retirement. At the same time, the pension plan is linked to the actual retirement age. The federal pension system sets different legal retirement ages for people born at different times. For example, the legal retirement ages of 1943 and 1957 are 66 years and 66 years and 6 months respectively, and those born after 1960 are 67 years old. Those who retire at the statutory retirement age can enjoy a full pension.

The federal pension system does not implement compulsory retirement. Those who retire before the statutory retirement age will be given a reduced pension, which will be reduced by 0.56% every month in advance, and they can retire at the earliest age of 62; Encourage retirement after reaching the statutory retirement age, and increase the pension by 0.25% every month. If you retire at the age of 70, you can get 130% of the full pension. Retirement after the age of 70, the pension will not continue to increase, and it will still be 130% of the full pension. Encourage retirees to continue to do what they can. People who are engaged in gainful employment after retirement can still receive a full pension if their annual total income is lower than a certain standard; When the income exceeds a certain standard, the pension will be deducted by 50% of the excess; Those who are still working over 70 years old will not be given a reduced pension regardless of their income.

Retirees are exempt from taxes when they receive federal pensions, but those whose annual total income exceeds a certain amount have to pay taxes. In 20 15, single retirees with an annual income of more than $25,000 and retired couples with an annual income of more than $32,000 need to pay taxes when receiving federal pensions. At present, these people account for about 40% of the retired population in the United States.

Beneficiaries of federal pension include not only retirees themselves, but also spouses (including divorce) and minor children (including adoption) who meet certain conditions.

(4) Relevant data

According to the data released by the American social security department, in 20 15 years,1670,000 American employees paid social security taxes, and 42 million retirees received pensions from the social security fund every month. On average, each single retiree receives a monthly pension of $65,438+$0,328 (about 40% of the average monthly income of retirees), and each retired couple receives a monthly pension of $265,438+$0.76.

The US Social Security Bureau * * * has more than 65,000 employees, which are distributed in the social security bureaus in 10 regions and their subordinate offices13,000. In addition to operating costs and payment balance, social security tax is mainly used to pay the federal pension and survivors' allowance (about 85%), and the living allowance for the disabled (and their family members) (about 15%).

In addition, for the elderly over the age of 65 who are unable to make a living because of the low federal pension and other incomes, the US social security department pays a monthly living allowance according to the federal supplementary security income plan to help low-income elderly people make a living. The living allowance comes from the federal government's fiscal revenue, not the social security fund. In 20 15, the monthly living allowance for each low-income retiree and each low-income retired couple who enjoy the supplementary guaranteed income plan is $733 and 1 100 respectively.

Second, the enterprise annuity plan (40 1K plan)

Enterprise annuity plan is a supplementary endowment insurance system for enterprises, which is led by enterprises, and the employer and employees pay the fees together and enjoy tax concessions. This is the most common retirement benefit plan offered by American employers.

(1) Background

Before the 1980s, employees' pensions in many private enterprises in the United States were paid in full by employers. Especially in enterprises with strong trade unions, employers are forced to pay various benefits for retired workers. Although this retirement benefit is beneficial to employees, it increases the economic burden of employers and is not conducive to the operation and development of enterprises. 1978, Item K added in Article 40 1 of the Internal Revenue Law of the United States stipulates that different types of employers, such as government agencies, enterprises and non-profit organizations, can enjoy tax preferences when establishing accumulated pension accounts for employees. According to this clause, more and more American enterprises choose the way that employers and employees jointly contribute and jointly establish retirement benefits. Therefore, American enterprise annuity plan is also called 40 1K plan.

At present, 40 1K plan has become the first choice for many employers in the United States to supplement the old-age security system for enterprises. According to the data of the American Association of Investment Companies, as of the second quarter of 20 13, the balance of assets in the 40 1K plan account reached 3.79 trillion US dollars, equivalent to about 22.9% of the GDP of the United States that year.

(2) Account management

After the employer sets up a 40 1K special account for employees, both parties * * * will transfer a certain amount of funds into the account. That is, the employer has invested in the employee's account. Among them, the total annual contributions of employees shall not exceed the prescribed upper limit (20 14 USD 2000); The proportion of contributions paid by the employer for employees is determined by both employers and employees through consultation, which is generally 3% to 7% of employees' wages. 40 1K account belongs to employees, and employees will transfer to any fund company that provides 40 1K plan.

Employers who provide 40 1K plans will generally designate a fund company to manage their employees' 40 1K accounts. Such funds usually have different types of investment portfolios for employees to choose from, including time deposits, stock funds, bond funds, index funds and balanced funds, and the investment targets range from the most conservative money markets to the most radical emerging markets. Employees make independent investment decisions and bear investment risks. Generally, when they are young, employees will choose a more aggressive portfolio to get a higher return on investment, but as they grow older, their investment methods will become more conservative. The pension that employees get from their accounts after retirement depends on the amount of contributions and investment income.

After the implementation of the "40 1K" plan in the United States, its funds quickly formed a good interaction with the stock market. Employees of American companies invested about13 of their pension funds in their own stocks, and the Dow Jones index rose from 1978 to 2000 points 1283.25%.

(3) Tax preference

The 40 1K plan is called "the biggest gift from the government to the middle class", and retirees and their beneficiaries who participate in the 40 1K plan can get real tax benefits.

Tax preference is embodied in "tax deferral". According to the law, employees' contributions and investment income in the 40 1K account are tax-free, and they will not pay personal income tax to the general account (including the added value of interest dividends) until they receive their pension from the account after retirement. Because the income of retirees is generally lower than that before retirement, the tax base is reduced, and the investment income tax exemption is added, the actual personal income tax paid by retirees will drop sharply.

(4) Receiving conditions

The conditions for receiving 40 1K plan pension are: the account holder is over 59.5 years old; Death or permanent incapacity to work; Medical expenses are greater than 7.5% of annual income; Resignation, layoff, dismissal or early retirement after the age of 55. If the householder withdraws money in advance before the age of 59.5, he will be subject to punitive tax; But it is allowed to borrow money in advance and then return it to the account.

When the householder retires, he can choose to use the funds in the 40 1K account in a lump sum, by stages and by transfer. Employees who have reached the age of 70.5 must start withdrawing money from their personal accounts, otherwise they will be taxed at 50% of the corresponding withdrawal amount. The purpose of this regulation is to stimulate the consumption of current retirees and avoid the trap of insufficient consumption.

(5) Civil Service Pension Scheme

The American civil service pension plan is similar to the 40 1K plan for employees in private enterprises. 1in June, 1986, the U.S congress passed the "federal employee retirement system", which stipulated the management measures of pension, assistance and disability benefits for all civil servants of the federal government, and its main contents were basically consistent with the above-mentioned 40 1K plan for enterprise employees. Civil servants at all levels (States, counties and cities) in the United States have also established a pension system similar to the 40 1K plan.

Three. Individual pension plan (IRA plan)

Personal pension plan, that is, personal savings insurance, is a personal supplementary pension plan that the federal government provides tax incentives and individuals voluntarily participate in. The individual pension plan was founded in 1970s, and its core is to establish an individual retirement account (IRA), so the individual pension plan is called IRA plan.

Account management

Unlike 40 1K account, IRA account is set up by participants themselves. Anyone who is over 16 years old but under 70.5 years old and whose annual salary does not exceed a certain amount, regardless of whether he has participated in other pension plans, can open IRA accounts in banks, fund companies and other financial institutions eligible to set up IRA funds. The householder can determine the annual payment amount according to his own income and deposit it into the account before April 15 every year. Individual retirement accounts have a maximum payment limit. For example, 2014 the maximum compensation limit for people under 50 is $5,000. Those whose annual salary exceeds a certain amount cannot participate in IRA plan. For example, among 40 1K planners, if the annual salary of unmarried people exceeds $56,000, and the annual salary of married people exceeds $89,000, it is not allowed to declare the IRA plan of that year.

The IRA account is managed by the householder, and financial institutions such as deposit banks and fund companies provide different combinations of IRA fund investment advice. The householder carries out investment management according to his own specific situation and investment preference at his own risk. IRA account has a good transfer mechanism. When the householder changes jobs or retires, the funds of 40 1K plan can be transferred to IRA account to avoid unnecessary losses. The pension that the householder receives from the account after retirement depends on the payment amount and investment income.

(2) Tax preference

IRA plan is not an investment behavior, but a saving behavior. Participants can use the funds in their accounts to engage in investment activities such as stocks and bonds, but these principal and income are strictly restricted and deposited in IRA accounts, and cannot be transferred to other accounts, so as to force these funds to be used after retirement.

Compared with ordinary investment accounts, IRA accounts have many tax benefits such as tax exemption. First, tax payment is delayed, and personal income tax is not paid within the annual tax exemption limit (that is, the maximum payment limit), and then tax is paid after retirement. Second, the deposit interest, dividends and investment income tax in the account are exempted. Participants can choose to store pre-tax or after-tax income. If the pre-tax income is saved, they should pay personal income tax according to the general account at the time of collection. If it is after-tax income from savings, you should pay personal income tax for additional value-added funds for many years at the time of collection. Preferential tax policies have promoted the sustained and rapid development of individual retirement account plans. At the end of 20 12, 44.7% of American families had individual retirement accounts.

(3) Receiving conditions

IRA householders cannot receive IRA pension until they are 59.5 years old, and they will be fined 10% of the withdrawal amount in advance. The government's initiative is to encourage householders to start using IRA funds after retirement. At the same time, the law stipulates that the head of household must begin to withdraw the account amount at the age of 70.5.

In recent years, different types of IRAs have been derived from IRA plans, such as Ross IRA, SEP IRA and simple IRA. Different from the traditional IRA, Roth IRA provides some different choices in terms of payment terms, annual tax exemption amount, withdrawal time and tax exemption methods. Let individual industrial and commercial households, small business owners and other different groups make more personalized arrangements according to their income and employment status. For example, unlike traditional IRA, Roth IRA pays personal income tax when depositing, saves the paid money, and is tax-free when withdrawing after retirement. When the head of household is 70.5 years old, it is not mandatory to withdraw the account amount; In addition, if the annual income of unmarried people and married people is higher than $654.38+$2500 and $654.38+$8300 respectively, it is not allowed to declare Roth IRA plan.

Individual retirement account plan is an important part of American pension system, and it is also a common macro-control means of American government. The increase of the tax-free quota of IRA account has increased the investment of IRA funds in the United States, and invested in various industries in the United States through an effective investment system, thus promoting the economic development of the United States and enabling ordinary Americans to share the benefits of economic growth.

Generally speaking, the federal pension system, 40 1K plan and IRA plan have played the roles of government, enterprises and individuals respectively, and achieved multi-level security effects. Among them, the federal pension system provides the most basic old-age security for the elderly, which is a "gift in the snow". The 40 1K plan and IRA plan can effectively increase the actual income of retirees and are "icing on the cake". At present, although many American enterprises have not participated in the 40 1K plan, the American baby boomers are the earliest beneficiaries after the implementation of the 40 1K plan. As this generation gradually enters retirement age, the 40 1K plan will play an increasingly important role in the American pension insurance system.