U.S. Retirement Plan Planning FAQ (2)
Q.6
Can immigrants still receive Chinese pensions after coming to the U.S.?
According to Chinese laws and normative documents such as the Social Insurance Law of the People's Republic of China, Certain Provisions on the Implementation of the Social Insurance Law of the People's Republic of China, and the Provisions on Retirees who are Allowed to Settle Abroad and Still Enjoy Retirement Benefits after Joining a Foreign Country, retirees can continue to enjoy the relevant retirement benefits after joining a foreign country.
In other words, as long as they meet the basic conditions for receiving pensions in China, retirees can continue to receive pensions after joining a foreign nationality. Therefore, whether you have immigrated to the United States or to countries such as Canada or Australia, you can receive your pension as long as you meet the conditions.
Note: According to Chinese laws and normative documents, such as the Social Insurance Law of the People's Republic of China and Certain Provisions on the Implementation of the Social Insurance Law of the People's Republic of China, there are two conditions for people living abroad to receive pensions: first, they have participated in basic pension insurance and have paid contributions for 15 years; second, they have reached the legal retirement age (subject to local or industry regulations). In general, to receive a pension, you must first complete the retirement procedures and obtain a pension account in China.
Q.7
Under what circumstances will I be issued a pension?
For Chinese Americans, whether they can continue to receive a Social Security pension after retirement if they do not live in the U.S., assuming they already have at least forty quarters of credits, depends on the following circumstances.
If you are a U.S. citizen, you can request the government to send your pension to a foreign address on a monthly basis, as long as you are not living in Cuba or North Korea, even if you are living overseas for a long period of time; if your bank account is in Hong Kong or Japan, the government can send your pension to your account by automatic transfer, but bank accounts in other Asian countries cannot be automatically transferred.
If you are not a U.S. citizen, you may not be able to receive your Social Security pension overseas. There are some exceptions to this rule. Citizens of some countries who live overseas for a long period of time may also receive a Social Security pension, but citizens of China, Hong Kong, Macau, and Taiwan are not included. Therefore, even if a citizen of mainland China, Hong Kong, Macau, and Taiwan has permanent residency (green card) in the U.S. and has worked in the U.S. for more than ten years, Social Security benefits will cease if you leave the U.S. for more than six months. In fact, as long as you leave the United States for 30 consecutive days, you are already considered to have left the United States, and you will have to live in the United States for a minimum of 30 consecutive days before returning to the United States.
In other words, if you are a U.S. citizen, a long absence from the U.S. will not affect your pension benefits. Please note, however, that automatic pension bank transfers are subject to certain conditions, which can be determined by consulting with the relevant U.S. agency. If you have a U.S. green card, it is important to remember that you should not leave the U.S. for more than six months at a time or your pension may be suspended.
Q.8
How do I calculate my pension?
Step 1: Take the total annual income of the highest 35 years of earnings (adjusted for inflation, of course, earning 50,000 in 1980 is much more than earning 50,000 in 2010, and the Social Security Administration has an annual inflation factor, which is converted to the current value at the end); if you have not worked for 35 years, take the income of all years of employment.
Step 2: Divide the total income by 35, and then divide by 12 to get the average monthly income.
Step 3: Calculate the pension at normal retirement age (for example, 2012): 90% for the first 767 years, 32% for the period from 767 to 4624, and 15% thereafter.
Then look at how much the U.S. population in each income bracket in the normal retirement age pension is.
1, the lowest salary income, such as salesmen, restaurant waiters, etc., the hourly rate of $ 8 to $ 10, if the average monthly income of $ 1400.
If you work for 10 years, the pension is $360.
If you work for 20 years, the pension is $701.
If you have worked for more than 35 years, the pension is $892.
2, general income, such as clerks, etc., the monthly salary of $ 2,000 to $ 3,000, if the average monthly income of $ 2,500.
If you work for 10 years, the pension is $643.
If you work for 20 years, the pension is $902.
If you work for more than 35 years, the pension is $1245.
3, middle income, such as elementary school teachers, journalists, etc., annual salary of $40,000 to $50,000, if the average monthly income of $3500.
If you work for 10 years, the pension is $765.
If you work for 20 years, the pension is $1084.
If you work for more than 35 years, the pension is $1565.
4、High salary income, such as professional white collar, annual salary of $60,000 to $100,000, if the average monthly income of $6,000.
If you work for 10 years, the pension is $993.
If you work for 20 years, the pension is $1542.
If you work for more than 35 years, the pension is $2131.
5. Top salary income, such as management, exceeds the $110,000 social security maximum, which is an average monthly income of $9,166.
For 10 years of service, the pension is $1,283.
For 20 years of service, the pension is $2017.
For 35 years of service or more, the pension is $2,605.
The maximum pension is $2,605 per month, and the average Social Security benefit for Americans is now $1,185 (this includes all Social Security recipients, most of whom are retirees, whose average pension is $1,298).
If you retire early, you can receive it as early as age 62, but only 75% of the full amount, which drops to 70% later; if you delay retirement, your pension will go up.
Q.9
I came to the US late and did not file any tax returns in the US in the early stage, is there any way to remedy the low pension in the future?
You can buy some pension to have a permanent and stable income. Buy a life insurance policy. You can use a loan to withdraw some of your money in advance to supplement your retirement life.
Q.10
Is it enough to prepare for retirement by American standards?
Less than half of the U.S. baby boomers have more than $100,000 in retirement funds. But it is estimated that the average couple spends up to $280,000 on health care in retirement. A Merrill Lynch report notes that one in five Americans is not sure how much money they need for retirement, and most have a savings shortfall of nearly 20 percent.
Q.11
What is the best way to ensure that retirement savings are adequate?
Use investment leverage to have some stable and low-risk investments such as annuities, indexed insurance, etc.
You can also buy some living benefit plans to transfer the risk of medical expenses.
Q.12
When is the right time to start saving for retirement?
Some people say it's better to make investments to prepare for retirement when the time comes, the earlier the better, the best time to plant trees is 10 years ago. So if we are preparing for retirement, we should plan at least a bit ahead 10 years, but the truth is, stable investments, especially indexed insurance, look at the age and health of the insured. So planning for your retirement pension at a young age not only protects you as early as possible, but also leaves you with a good amount of money for yourself.
Q.13
Should I buy insurance or pension first?
Insurance is a necessity, not a luxury. Many people say that they can't even afford to eat, so why buy insurance?
We just have to prepare insurance as if we were preparing meals every day.
Health care opens for purchase at the end of October every year, and if you don't buy it, you just have to wait a year. Unless there is a change in status, etc., or a newborn child can only be specially registered.
Q.14
Speaking of insurance, what kind of insurance should we buy to give our family a better life?
Long-term care insurance. When people reach 80 years old, 80% of them may need nursing care insurance, and our medical insurance does not cover long-term care insurance.
Critical illness insurance. Even in the unfortunate event of cancer, etc., you don't have to worry about family expenses.
Disability insurance, incapacity insurance. Even if you lose the ability to work, you have an income supplement. Pass on all future risks to the insurance company for a small fee.
