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?
Unfortunately the maximum Social Security benefit someone can get right now is $2,639 at full retirement age, a little more if you wait until you are 70. Most people did not earn enough to get that amount. If someone is going to be planning on living just on their Social Security benefits, they will be living in poverty or close to it and will need additional aid such as Section 8 housing and food stamps.
At age 65, almost everyone is entitled to part A Medicare which covers hospital stays. If you want part B, which covers other services not related to a hospital stay or part D which is drug coverage, you will have to pay a premium that comes out of your social security check. Many people on social security are living at the poverty level or close to it, so those people can get Medicaid. Medicaid will pay for the part B and part D premium for you, and will also "cover" the deductible and copays. (Actually, the Medicare allowable is higher than the Medicaid allowable. So what really happens is the Medical professional gets the Medicare payment and then writes off the balance. In order for a doctor or medical professional to accept Medicare and Medicaid, they must agree to write this off, by law.)
Oh, That explains it. Here the maximum pension is around 2500/month which is "a lot" considering salaries (and cost of living) are several times less than the USA equivalent. Of course it is because the contributions during all the work life are *HUGE* (around 30% of the salary goes to social security which includes full medical care for everyone).
Also in Spain it is usual to fully own the home (or even a second house) before the time one reaches retirement. It is main savings asset for most the people, it is in the culture. So that's one less expense to account for.
In exchange, very little people have private pension funds... the home is it for most.
I am sure that must change sometime in the future. First they kept postponing the age, then raising the number min/max of work years needed, then stopping increasing the amounts of the pension.... next will be directly reducing them. Either that or the numbers won't add up (they already don't).
I have heard (and watched in tv films) many horror stories about people having to spend tens of thousands, or even hundreds of thousands of fiat into (uncovered) medical bills in the USA. I suppose it is an exaggeration?
Here people complains because dentists are the only thing that is NOT included in social security even if that only amounts to a $50-$100 bill for a filling every few years or whatever. Oh, yeah, unjustified plastic surgery is also not included, as expected.
Talking about that I will never understand how so many REALLY expensive care is included for free and dentists, being such an insignificant portion of the whole, aren't. Mysteries of life. But not like I am gonna complain when that amounts to maybe 1% of the total already offered for free.