Quote from: bones261 on May 27, 2018, 03:20:43 AM

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Quote from: bones261 on May 27, 2018, 02:31:35 AM

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Quote from: jojo69 on May 24, 2018, 04:29:11 AM

I leave for two fucking days

Jesus Christ you guys, do I have to do everything?

What? You don't like our Delicious Discounted BTC Dip for $7350? Stock up for your retirement fund!

You're welcome!

Good thing that I already have Ramen as a snack everyday. It appears there is going to be some lean times up ahead. Better crack open that book of Ramen recipes someone gave me a few years ago so that I can now enjoy for breakfast, lunch and dinner. Bonus: with the new Ramen diet plan, I won't need to worry about a long retirement, if I reach retirement at all... Cheesy

Talking about retirement. I have always have a doubt about how do retirement pensions work in the usa.

I think 401K (from what I have read here and googling a bit) is some sort private retirements savings pensions. Whilst it is individual choice the employer contributes to it. Ok.... but it is additional to a social security state pension or is it that 401 IS the standard pension that everyone has?

I mean, is there a mandatory minimum state pension or it is the people choice to have one and some people could end with NO pension even if they did work for all their lives?

What is the minimum retirement age when you can start receiving that pension?

My main question is if it is somewhat like in most of euro zone where people are FORCED to contribute to the state pension and therefore have a "guaranteed" pension depending on how much they contributed over their work life or if it is the same as the medical cover where either you pay yourself for it (or your employer, but not mandatory) or you could end up having to pay for all your medical expenses.

   No one is forced to contribute to a 401k. If your employer offers a 401K, they can take money out of your paycheck, and the tax on that amount will be deferred until you withdraw from your 401K. If you draw out of your 401K before retirement age of 59 1/2, you will have to pay a penalty of 10% on top of the tax. Many employers that offer a 401k also include a match. Most companies match 50% of what the employee contributes. The catch is that you usually have to work for an employer for a certain amount of time before you are fully vested and can claim this portion if you leave the employer. My employer has a vesting schedule of 5 years.
   Another option for retirement is an standard IRA and a Roth IRA. In a standard IRA, you get to defer your taxes on your contributions. However, if you withdraw before age 59 1/2, you will pay a penalty on top of the taxes. In a Roth IRA, you pay the tax on the contributions. If you withdraw before 59 1/2, you only pay the penalty and the tax on the income, not the contributions. If you withdraw after you are 59 1/2, the money is tax free.
   Then we have social security. Social security is a tax that everyone must pay. (I think some government employees are exempt. But I am unsure.)You pay a portion and your employer pays a portion. If you are self employed, you pay both portions. Although the Social Security program has run at a surplus for quite sometime, the government has used the money for other things and replaced it with bonds. Also, the Baby Boomer generation (people born from 1948-1960 in the US) are now reaching retirement. So I do not believe the Social Security program is running at an excess anymore. If it is, it won't be for long unless they lessen the benefits or raise the tax. You can begin to collect social security at age 62, but your benefit will be reduced.. You can wait to get the full benefit at a certain age. the exact age and penalty for early retirement depends on when you were born. the chart can be found, here. https://www.ssa.gov/planners/retire/agereduction.html

I think I get it now. 401K, IRA, etc... are private (individual choice) retirement/savings plans same like here.

Social security also seems to be the same than here (except for the medical care, that it is fully included for everyone no matter how much they contributed or if they have additional private medical plans) .

Also it is the same situation in that the cashflow has been reduced due to the poblation growth (or lack of younger workforce in relation to retirees) and the retirement age has keep increasing. To me it will be, at least, 67 (maybe they will increase it higher by the time I reach it).

It is also the same in that it is expected that they will have to increase contributions or reduce pensions sometime in the future as currently the cashflow is already negative and the reserves are almost empty The money will have to come from somewhere to keep current benefits....

Currently the social security pensions for people that had good salaries "guarantees" and get the max are more than enough for a reasonable retirement even without the need of additional private pension plans or significant previous savings..... but that is probably going to change in the future.

I think have never read people talking about social security when discussing about retirement here and only about 401k's, IRA, etc so I had the doubt if that there was the case that no (forced) social security was in effect in USA. Or maybe the current amounts of that social security are so small in comparison to previous salaries that noone takes it into account?