3 out of 10. This is the number of retirees who do not receive the full pension to which they are nevertheless entitled. It’s no surprise that preparing for retirement is not easy. Between the various procedures, the different pension plans, the calculation methods, or even the retirement age, a lot of information, however crucial, is missing from future retirees. Fortunately, we are here to explain everything there is to know about retirement in the United States.
1. Anticipate a loss of income
Retirement is accompanied by a loss of income that should be anticipated. However, many policyholders have no visibility on the amount of their future pension before starting the process. However, pension funds have set up tools to carry out simulations. For example, all insured persons can benefit from a Retirement Information Interview from the age of 45, during which they can request a Global Indicative Estimate in order to project the amount of their future retirement by analyzing the details of their past career and their income.
The system offers a good level of protection compared to the rest of the world: the average replacement rate at age 62, with all the quarters necessary for a full pension, is around 75%, well above the average rate for OECD countries (58%). Nevertheless, the situation of the insured varies greatly depending on the scheme to which they are affiliated or their level of income.
2. Remember to check your career statement
To calculate the amount of the pension at the time of retirement, the pension schemes refer to the career statement, which lists all the pension rights accumulated in your insured account. It is essential to check, sufficiently in advance of your provisional liquidation date (to ensure that the plan can quickly proceed with a possible regularization), that the information is correct:
- Are there periods of activity that do not appear in your career? The older the job (summer jobs, for example) or the shorter (temporary, fixed-term contract), the more vigilance you have to be.
- Have periods of inactivity (compensated unemployment, sick leave, parental leave, etc.), which will be counted in the calculation of your pension, been taken into account?
- Your children also entitle you to additional quarters or to increases for large families. Remember to check your statement. Almost half of the errors (49.5%) relate to the career, for an average loss of earnings of €123 per insured. Remedies exist in the event of a dispute with the pension funds, but beware of the limitation period!
3. List your rights
When you retire, it is important to take stock of your rights and not forget anything. For example, if you have worked abroad as an expatriate during your career, it is likely that you have contributed towards your retirement in the host country. You will have to start the process yourself, which can take time… Be careful; the rules can vary according to the country and do not systematically guarantee that you will recover your contributions.
Thus, in Japan, it is necessary to have accomplished 10 years of activity in the country to open rights. If you are lost, it is perfectly normal! You may also have contributed, on a voluntary or compulsory basis, individually or collectively via your company, to a capitalization “supplementary pension” scheme.
Even if you have left the company, you have acquired the right to collect the fruits of it… if you ask for it! However, many policyholders have even forgotten these funds’ existence or did not know they had contributed! It provides, in particular, for increased access to information and an obligation for the employer to provide the employee, upon leaving the company, with a summary of his rights.
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