Retirement plans or pensions may be classified as defined benefit or defined contribution according to how the benefits are determined.
- Defined Benefit Plan: Guarantees a certain pay-out after retirement, according to a fixed formula which usually depends on the member's salary and the number of years' membership of the plan.
- Defined Contribution Plan: The pay-out is dependent upon the amount of money contributed, and the performance of the investment vehicles utilized. Owning company stock or a 401K are examples of this type of plan.
Some types of retirement plans, such as cash balance plans, combine features of both defined benefit and defined contribution schemes.
Most companies offer step-by-step instructions for investors to secure a personalized plan to create savings for the future. For a complete primer on investing in your future, try
Fool.com/Retirement/RetirementPlanning/
Example of Pension Providers in the USA
Most plans are supported by employers for their employees. If your company does not offer a pension plan, it is possible to become a part of a community like a union that will secure a pension for its members. Examples are a teacher's union or metalworker's guild.
In addition, plans like 401K's can be purchased individually from investment companies like:
Expat Pension Plans
According to the US Social Security Administration, "The aim of all US totalization agreements is to eliminate dual Social Security coverage and taxation while maintaining the coverage of as many workers as possible under the system of the country where they are likely to have the greatest attachment, both while working and after retirement. Each agreement seeks to achieve this goal through a set of objective rules."
At present, the United States has totalization agreements with the following countries:
Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Quebec, Slovak Republic, South Korea, Spain, Sweden, Switzerland, and United Kingdom.
For complete information about each of the country expat pension plans and agreements visit: Mobilityexchange.mercer.
How to apply:
When you are filling in or completing an application for an USA social insurance payment, there is a section on the application form that will ask you which country have you been employed to double-check that it has a bi-lateral social security agreement.
You will be asked for the following information:
- Country where you worked
- Name and address of your employer there
- Dates you worked there
- Social Security Number there
Where to apply:
To claim a social welfare payment, you should visit the Social Security Office Information and fill out the correct application form.
Social Security Office Information
5th Floor
237 W 48TH Street
New York, NY 10036Tel: 1-800-772-1213
Homepage: Ssa.gov/international/agreements_overview.html
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