As the world's largest economy, the United States has long been one of the ideal immigration destinations for global investors. So, for investors, what benefits can they enjoy after immigrating and retiring in the United States? Let's take a look with the editors at Worldway Immigration Group.
Regarding the several fixed sources of income after retirement in the United States:
1. Social Security Income
The retirement age in the United States ranges from early retirement at 62, normal retirement age at 66, to late retirement at 70. If you have a cumulative record of ten years of tax filings (which can be intermittent) in the United States, you will be eligible to receive Social Security benefits after retirement. The amount of Social Security benefits varies from $845 to $2,640 per month depending on your annual tax filings (this amount will increase by about 3% each year based on the calculated inflation rate).
If you choose to retire early at 62, the monthly amount you receive will be 75% of the normal retirement benefit. If you choose to retire late at 70, you can receive 132% of the normal retirement age benefit each month.
2. Company Retirement Accounts established by companies for management and full-time employees (Defined Contribution Plans such as 401k and Defined Benefit Plans such as Pension)
The main benefits of company-established retirement accounts are three-fold:
(1) Companies provide a subsidy of 3%-12% or more of annual income each year. For example, if an employee's annual income is $50,000, the company will put $1,500 to $6,000 into the employee's retirement account each year as a source of income after the employee retires.
(2) Employees can also choose to put a portion of their income into the company's retirement account. This portion of money is not subject to personal income tax for that year, and investment gains are also tax-free. Taxes are only paid at the retirement tax rate when the money is withdrawn after retirement.
(3) Even if the company goes bankrupt or the employee changes jobs, the money in the company's retirement account will not suffer any losses. In the event of legal disputes requiring compensation, this money will not be paid to others. This is why many doctors choose to wait until 2 years after retirement to start withdrawing money from their 401k, as there is a 2-year statute of limitations, and after two years, there is no risk of being sued by patients for medical malpractice from 2 years ago.
3. Individual Retirement Accounts (IRA, Roth IRA)
Compared with company retirement accounts, individual retirement accounts enjoy the same benefits as (2) and (3) above, except for the lack of the 3%-12% company subsidy.
4. Annuities
An annuity is also a type of insurance, a financial product created by insurance companies to provide a fixed income after retirement to protect investors who might live too long and find their savings insufficient to meet their future living needs.
Annuities are divided into two types: Immediate Annuity and Deferred Annuity.
Immediate Annuity means that from the year you put money into the insurance company's annuity account, the insurance company will pay you a certain % payout ratio based on your age. For example: the payout ratio for those in their 60s is about 6% per year, and about 7% per year for those at 70.
Deferred Annuity means that you give your money to the insurance company, and the insurance company guarantees that your principal will grow by 5%-7% per year, but the insurance company stipulates that you can only withdraw money after a specified number of years (usually 7 to 10 years). When you withdraw money, the contract will specify the maximum % you can take out in a year (e.g., 5% max withdraw).
5. Medical Security
Before the age of 65, companies or individuals are responsible for their own medical security; after 65, the responsibility for your medical security will be transferred to the government. After paying a small monthly medical security fee, you will gain access to one of the best medical security systems in the world.
It is worth noting that you must remember to apply at age 65; missing the deadline will result in a penalty, and it is a lifelong penalty.
Another point is that even with one of the best medical security systems in the world, the U.S. medical security system only covers 90 days for long-term care; beyond 90 days, you must bear all care costs yourself.
I believe that through the above content, everyone has fully understood the relevant benefits that can be enjoyed when retiring in the United States. For a long time, the United States' superior living environment, rich educational resources, sound social welfare system, and more open and fair social atmosphere have deeply attracted many high-end individuals in China.
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