More and more domestic people immigrate to the United States for retirement, so what is the US pension system? This is probably a topic that many people are interested in. Let’s take a look at the detailed interpretation of the US immigration pension system in 2020.

How is the pension system in the United States? The pension insurance system in the United States has a history of more than 200 years. After long-term development, the current pension insurance system mainly consists of three pillars: The first pillar is the government-led and mandatory social pension insurance system, that is, the federal pension system.

The second pillar is the enterprise supplementary pension insurance system, which is led by enterprises and jointly funded by employers and employees, that is, the enterprise annuity plan; the third pillar is the personal savings pension insurance system that is voluntarily participated by individuals, that is, the individual

Pension plan.

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, reliable pension security for retirees.

1. Federal Pension System The federal pension system is a basic pension insurance system led by the government. It is a security-type social welfare provided by the US government for retirees.

The specific contents are as follows: (1) Payment of social security tax Social security tax is the core content of the federal pension system.

Social Security tax is the second largest tax in the United States after personal income tax. It is levied uniformly nationwide by the federal government according to a certain salary ratio. It is mandatory for enterprises to withhold the social security number (SSN) of employees when paying monthly wages.

Pay on your behalf.

After social security taxes are collected centrally by the Domestic Wage Bureau of the U.S. Department of the Treasury, they are earmarked for the social security fund established by the U.S. 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 Administration and implemented after approval by Congress.

The adjustment is based on forecast data on population aging and pension expenditure needs.

For example, the social security tax rate was 10.16% of an employee's salary in 1980 and was raised to 12.4% in 1990.

The social security tax rate has not been adjusted since 1990.

The social security tax rate in 2015 is 12.4% of the employee's salary, with 50% each paid by the employee and the employer.

That is, the employee and the employer each pay 6.2% of the employee's salary; for the self-employed, they pay 12.4% of the salary.

The federal pension system encourages "saving more social security taxes while working and receiving more pensions after retirement."

Employees with higher wages pay more in Social Security taxes and receive more federal pension benefits in retirement.

At the same time, in order to reflect social fairness and prevent a very small number of retirees from receiving excessively high pensions, the social security tax sets an upper limit on taxable wages. The part of wages that exceeds the upper limit of taxable wages will no longer be subject to social security tax.

The taxable wage ceiling is adjusted year by year as prices and wage levels change.

For example, the taxable salary cap was $94,200 in 2006 and increased to $118,500 in 2015.

Accordingly, in 2015, employees could pay at most $14,694 in Social Security taxes (11.85 × 12.4%).

(3) Receive federal pensions. The federal pension system stipulates that employees must pay taxes for 40 quarters (equivalent to 10 years of payment years) before they can receive federal pensions on a monthly basis after retirement.

At the same time, pension calculation is linked to the actual retirement age.

The federal pension system stipulates different statutory retirement ages for people born at different times. For example, the statutory retirement ages for people born in 1943 and 1957 are 66 years and 66 years and 6 months respectively. The statutory retirement ages for people born in 1960 and later

The retirement age is 67 years old.

Those who retire until the statutory retirement age can enjoy full pension.

The federal pension system does not implement mandatory retirement. Those who retire before the statutory retirement age will receive a reduced pension payment. The pension will be reduced by 0.56% for each month in advance. The earliest retirement can be as early as 62 years old; retirement after the statutory retirement age is encouraged.

The pension will increase by 0.25% for each month of delay. If you retire at the age of 70, you will receive 130% of the full pension. If you retire after reaching the age of 70, your pension will not continue to increase and you will still receive the full pension.

130%.

Retirees are encouraged to continue working as hard as they can.

Those who engage in gainful employment after retirement can still receive full pension if their annual total income is below a certain standard; if their income exceeds a certain standard, their pension will be reduced by 50% of the excess amount; if they are still working after the age of 70, regardless of their income

Regardless of the amount, the pension will not be reduced.

Retirees receive federal pensions tax-free, but those whose annual gross income exceeds a certain amount are taxed.

In 2015, single retirees making more than $25,000 a year and retired couples making more than $32,000 were taxed when receiving federal pensions.