options for withdrawing funds from an AFP

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thisisreallycomplicated
Rank: Chile Forum Citizen
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Joined: Sun Aug 07, 2011 6:25 pm
Location: Coquimbo

options for withdrawing funds from an AFP

Post by thisisreallycomplicated » Mon Aug 27, 2018 11:41 pm

Is there any way to withdraw funds from an AFP without leaving Chile, besides getting a monthly benefit payment after you reach retirement age? AFP's suck in general, but they're even worse if you get screwed by the US social security's "Windfall Elimination Provision (WEP)". I'm looking for anything, even if it has penalties, and I have to wait until I'm really old. If not, how long can you wait before you start receiving benefits? I'm expecting US social security to go broke anytime now, so the WEP may not affect me if I wait long enough to collect AFP benefits.

edit: I'm still researching WEP (just discovered it a couple days ago), and now it looks like a lump sum payment may not help. But I'm not sure yet, if waiting longer to receive AFP benefits would.
“Now it’s conspiracy – they’ve made that something that should not even be entertained for a minute, that powerful people might get together and have a plan. Doesn’t happen, you’re a kook, you’re a conspiracy buff!” – George Carlin

paladin
Rank: Chile Forum Citizen
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Re: options for withdrawing funds from an AFP

Post by paladin » Tue Aug 28, 2018 7:38 pm

You may ant to check with ISP, as when I arrived here, and I think is still the case, if you are a foreigner from a country that has a bilateral agreement with Chile, which the US has, then you can opt out of paying into an AFP, and hence the situation that you mentioned wouldnt arise. Apart from that, on the one hand, the rules are very clear that there are no refunds, and to retire early you need to comply with certain requirements. Having said that, I’m sure I recall at some time, reading that although it’s not easy, foreigners can get their contributions refunded when returning to their home country. I cant recall where I read it, but if you go along to the ISP office near La Moneda, they should be able to clarify it for you. When I went there recently, to get a cert needed for me to move from an isapre to fonasa, there was no waiting and the people were very helpful.

thisisreallycomplicated
Rank: Chile Forum Citizen
Posts: 1845
Joined: Sun Aug 07, 2011 6:25 pm
Location: Coquimbo

Re: options for withdrawing funds from an AFP

Post by thisisreallycomplicated » Tue Aug 28, 2018 11:53 pm

paladin wrote:
Tue Aug 28, 2018 7:38 pm
You may ant to check with ISP, as when I arrived here, and I think is still the case, if you are a foreigner from a country that has a bilateral agreement with Chile, which the US has, then you can opt out of paying into an AFP, and hence the situation that you mentioned wouldnt arise.
I don't think that applies to me, since I'm self-employed. If I was working in Chile for a US company, I probably could do that. But there might be a time limit, something like 5 years.
paladin wrote:
Tue Aug 28, 2018 7:38 pm
Apart from that, on the one hand, the rules are very clear that there are no refunds, and to retire early you need to comply with certain requirements.
My best option may be to start US social security benefits as early as possible, to minimize decreases due to it going broke. And start AFP benefits as late as possible, to minimize additional US benefit decreases. This assumes WEP doesn't assume a specific start date for AFP benefits, regardless of the actual start date. Also, starting US benefits early should minimize WEP decreases, since WEP is capped before decreasing for early US retirement.
paladin wrote:
Tue Aug 28, 2018 7:38 pm
Having said that, I’m sure I recall at some time, reading that although it’s not easy, foreigners can get their contributions refunded when returning to their home country. I cant recall where I read it, but if you go along to the ISP office near La Moneda, they should be able to clarify it for you. When I went there recently, to get a cert needed for me to move from an isapre to fonasa, there was no waiting and the people were very helpful.
There was a thread a while back discussing that, I think it was started by zeronz. And that's what I would do if I ever plan to leave Chile. But right now I plan to stay here, so I'm trying to find other options.
“Now it’s conspiracy – they’ve made that something that should not even be entertained for a minute, that powerful people might get together and have a plan. Doesn’t happen, you’re a kook, you’re a conspiracy buff!” – George Carlin

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