What's considered a typical personal pension contribution in yankeeland?
We have a pretty complex system. Only government workers, railroad workers, and some legacy industries have "pensions." Most of us have a combination of private retirement plans, and social security.
Social Security replaces around 50% of your income, if you elect to wait to take payments until age 70 and have had 35 years of work contributing, 30% if you start taking social security before age 70. To have ANY social security, you need to have worked 10 years with contributions, which are 6.2% on the employeer, and 6.2% on the employee ( so self-employed 12.4% ).
Now taking a 50%-70% paycut obviously causes problems even if you have paid off a mortgage, so many of us have private retirement plans. It's closer to . IRAs you can contribute up to $6500 a year, and can start withdrawing from that plan with a tax benefit at 59.5 years of age, and must start taking withdraws at 73. That's on you though, it's entirely self-managed and optional.
Most companies offer 401(k) plans, where you contribute a percentage of your salary ( typically 3-6% ), and the company matches that amount. You get to choose what to invest it in from some limited options, and similar to IRAs you have a tax benefit to this.
In the US, your income doesn't get dragged down as much by taxes and forced contribution plans, but it's up to the individual to invest and save and find an employer with good retirement contributions or else you end up poor in retirement.
Phil is completely fucked. It's salvageable as he's age 40 and has 30 years to fix this, but he essentially has a negative net worth and may have never even logged in to the social security website to check his credits. (
https://www.ssa.gov/myaccount/ ). People who work under the table or don't properly pay taxes aren't owed a dime of social security, and are often livid when they find that out. They never paid in, so they never get paid out.
