Revealed! US Pension Schemes List 2024: Know Eligibility Criteria & Pension Amount
Types of Pension Schemes in the USA
The US has many pension plans for different occupations and preferences. A breakdown of the main types:
1. Social Security
Social Security offers retirement income to most US citizens and permanent residents. It pays monthly based on earnings history, retirement age, and years worked. Social Security benefits average $1,811 per month in 2024.
2. Employer-Sponsored Pension Plans
Traditional employer-sponsored pension plans are offered by government organizations, unions, and some private firms. These plans guarantee monthly income depending on salary, years of service, and retirement age.
3. Individual Retirement Accounts (IRAs)
IRAs are tax-advantaged self-directed retirement savings accounts. Two primary types:- Traditional IRAs: Tax-deductible contributions, taxable withdrawals.
Roth IRAs: After-tax contributions, tax-free withdrawals.
4. Employer-Sponsored Retirement Plans
Most of these plans are:- Employers commonly match employee contributions to 401(k) plans. These plans offer tax advantages and investment flexibility.
403(b) Plans: Non-profits and tax-exempt public schools provide these plans like 401(k)s.
5. Other Retirement Savings Options
Health Savings Accounts (HSAs): Pre-tax savings for qualified medical expenses that can grow tax-free.
Annuities: Insurance contracts that guarantee retirement income in exchange for a lump amount or recurring payments.
Eligibility and Amounts
Eligibility criteria and benefit amounts vary across different pension schemes:
Social Security
– Eligibility: Individuals need at least 40 quarters of covered work.– Benefit Amount: The average monthly benefit is around $1,811, with variations based on earnings history and age of retirement.
Employer-Sponsored Pension Plans
– Eligibility: Typically requires a minimum number of years of service.– Benefit Amount: Pre-determined and not dependent on market fluctuations.