Author Topic: Workers in 18 countries enjoy greater retirement security than in the U.S.  (Read 5196 times)

prof61820

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Interesting post on international retirement security.  What can the US do to boost its ranking?

http://www.msn.com/en-us/money/retirement/heres-the-key-to-retirement-security/ar-AA9dNC7

From the Article: "Researchers note that all the countries at the top of the list share three important traits:

    1. A growing industrialized economy with a strong financial system and regulations
    2. Broad access to health care and other social services
    3. Substantial public investment in infrastructure and technology

Part of what holds the U.S. back is growing income inequality, which means resources arenít available to all Americans, the report concludes. The U.S. also has fewer doctors and hospital beds relative to population than many developed nations."

wtjbatman

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #1 on: February 10, 2015, 09:02:59 PM »
Thanks Obama

deborah

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #2 on: February 10, 2015, 09:34:46 PM »
Here is the report itself http://ngam.natixis.com/global/1422746034925/Global+Retirement+Index+Report - the top 11 countries are all northern European plus Australia (3) and New Zealand (10) and Canada comes in 12th.

It is interesting to note that just about all the nations in the top 20 had their scores go down, and the US score went down less than a most.

Quote
a clear example of these forces at play are the high scores earned by the United States in the finances in Retirement index where the country saw the results of continued economic growth in year-over-year improvements for non-performing loans, inflation and interest rates. improvements in these factors are overshadowed by a persistent budget deficit and high levels of government debt, rising tax
pressures and increased income inequality. additionally, the availability of government services has not kept pace with economic growth and high healthcare costs are troublesome for retiree wellbeing. as a result, the U.S. remains in the 19th position in the index for a third year
« Last Edit: February 10, 2015, 09:39:03 PM by deborah »

prof61820

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #3 on: February 11, 2015, 04:37:18 AM »
Here is the report itself http://ngam.natixis.com/global/1422746034925/Global+Retirement+Index+Report - the top 11 countries are all northern European plus Australia (3) and New Zealand (10) and Canada comes in 12th.

It is interesting to note that just about all the nations in the top 20 had their scores go down, and the US score went down less than a most.

Quote
a clear example of these forces at play are the high scores earned by the United States in the finances in Retirement index where the country saw the results of continued economic growth in year-over-year improvements for non-performing loans, inflation and interest rates. improvements in these factors are overshadowed by a persistent budget deficit and high levels of government debt, rising tax
pressures and increased income inequality. additionally, the availability of government services has not kept pace with economic growth and high healthcare costs are troublesome for retiree wellbeing. as a result, the U.S. remains in the 19th position in the index for a third year

Thanks for sharing.  Here are their policy recommendations.

1. While government benefits may no longer be the sole source of income for many retirees, these funds still represent an
important income source and as such they will still need to be funded, as will health and welfare programs that are essential
to wellbeing in retirement.

2. Beyond these programs, governments can help address retirement needs with sympathetic tax policies that encourage
individuals to take the first step toward ensuring a secure retirement: saving a larger share of their annual salary toward their
future needs and obligations.

3. Establishing policies that encourage innovation is another critical step forward. Mandatory or semi-mandatory programs such as
Australiaís Superannuation and New Zealandís KiwiSaver have proven to be effective measures for increasing participation among
individuals and employers alike.

4. Recently, in the U.S., the State of Illinois has announced the Secure Choice retirement savings program in which individuals not
covered by a workplace retirement plan will be automatically enrolled. Contributions to individual accounts will come via a 3%
payroll deduction. While participation is voluntary, individuals will need to opt out should they not want to contribute. The plan,
which is similar to whatís been discussed by the Obama administration at the federal level, could present a powerful test case for
addressing a growing retirement savings crisis in the U.S. and abroad.

5. It is important to note the direct connection between fiscal policy and retirement security. Sound, forward-thinking policies that
are sensitive to the strength of the national economy go a long way toward improving the quality of life for retirees. Recent moves
by Switzerland to strengthen the franc against the euro go a long way toward increasing purchasing power of the countryís retirees,
a critical consideration for individuals seeking to make their retirement savings last.

Sid Hoffman

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #4 on: February 11, 2015, 10:44:07 AM »
What can the US do to boost its ranking?

I don't know, what does the article say?

Quote
Europe leads in quality of retirement
Top-ranked countries in 2015 benefited from well-developed and growing industrialized economies with strong financial systems and regulations, broad access to healthcare, and substantial public investment in infrastructure and technology. Despite relatively heavy tax burdens, these countries rank high in per-capita income levels and low in income inequality.

Asked and answered.  You want more money in government funds?  You raise taxes.

Schaefer Light

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #5 on: February 11, 2015, 11:05:18 AM »
Do you want security or do you want freedom?

Numbers Man

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #6 on: February 11, 2015, 11:11:23 AM »
Do you want security or do you want freedom?

^ Right on! I want freedom to plan my own life on my terms.

marketnonsenses

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #7 on: February 11, 2015, 11:41:56 AM »
Isnt the idea that security is an expensive illusion part of mustachism?

Cookie78

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #8 on: February 11, 2015, 11:49:28 AM »
Do you want security or do you want freedom?

^ Right on! I want freedom to plan my own life on my terms.

I'm feeling this way about my pension right now!

4alpacas

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RFAAOATB

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #11 on: February 11, 2015, 04:44:33 PM »
Do you want security or do you want freedom?

Security.  The problem with freedom to succeed is the flip side being the freedom to fail.  We need to exploit as many low to medium cost interventions as we can to increase security and limit the freedom to fail.

Acknowledging human weakness and subsidizing preventative measures will save more money than paying for damages caused by weakness.

If security and freedom are on a continuum, perhaps now we are at 80% freedom 20% security.  If we get to 60% freedom 40% security, we could build society with less poverty, crime, and stress.  If we go all the way and have all security and no freedom, then life becomes a prison, albeit the possibility of being a very comfortable prison.

deborah

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #12 on: February 11, 2015, 05:45:05 PM »
It really depends upon how you define freedom. No society is free. Each society decides which freedoms to limit. For example people are not free to kill other people. All societies allow some people to kill some others (police, military...) - but in most good societies this is limited to certain people who have to account for their actions afterwards.

I don't understand how freedom equals freedom from tax, when taxes provide things like roads and footpaths and other things that everyone uses. What other things taxes are used for is a different thing.

The Australian Superannuation system is not a tax. Your employer is obliged to put a percentage of your salary (currently 9.25%) into a superannuation account opened in your name. It is not included in your salary amount, so I would consider it like a 401k employer match, from what I have read here. It is a pre-tax contribution.

prof61820

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #13 on: February 12, 2015, 05:43:58 AM »
The Australian Superannuation system is not a tax. Your employer is obliged to put a percentage of your salary (currently 9.25%) into a superannuation account opened in your name. It is not included in your salary amount, so I would consider it like a 401k employer match, from what I have read here. It is a pre-tax contribution.

The US should adopt the Australian model.

prof61820

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #14 on: February 12, 2015, 05:45:59 AM »
Do you want security or do you want freedom?

^ Right on! I want freedom to plan my own life on my terms.

I'm feeling this way about my pension right now!

How so?

prof61820

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #15 on: February 12, 2015, 05:47:06 AM »
Do you want security or do you want freedom?

Why can't we have both?

marketnonsenses

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #16 on: February 12, 2015, 06:05:35 AM »
Do you want security or do you want freedom?

Why can't we have both?

Ask Aldous Huxley

prof61820

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #17 on: February 12, 2015, 06:11:56 AM »
Do you want security or do you want freedom?

Why can't we have both?

Ask Aldous Huxley

I just called him.  The answer was "yes, you most definitely can have both security and freedom."

MidWestLove

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #18 on: February 12, 2015, 06:44:14 AM »
???

"The Australian Superannuation system is not a tax. Your employer is obliged to put a percentage of your salary (currently 9.25%) into a superannuation account opened in your name. It is not included in your salary amount, so I would consider it like a 401k employer match, from what I have read here. It is a pre-tax contribution."

it is a tax - anytime government under the threat of force takes money, it is a tax.   they can 'hide' it by stating it does not come out of your salary but that is a lie too (to the company it is part of your costs, part of your compensation whether they give it to you or send it to the government on your behalf). 
« Last Edit: February 12, 2015, 06:46:07 AM by MidWestLove »

Sunnymo

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #19 on: February 12, 2015, 07:16:50 AM »
???

"The Australian Superannuation system is not a tax. Your employer is obliged to put a percentage of your salary (currently 9.25%) into a superannuation account opened in your name. It is not included in your salary amount, so I would consider it like a 401k employer match, from what I have read here. It is a pre-tax contribution."

it is a tax - anytime government under the threat of force takes money, it is a tax.   they can 'hide' it by stating it does not come out of your salary but that is a lie too (to the company it is part of your costs, part of your compensation whether they give it to you or send it to the government on your behalf).
????

The superannuation system is certainly not a tax (it is not like the US social security system) is is retirement savings in your name. It is not held by the government but by your nominated fund.

You have choice of fund, can choose investment mix, risk profile etc. once you earn $450 per month from a job the employer must contribute to super for you, so even students working their way through Uni will most likely end up with some retirement savings. The rate is currently set at 9.5% and will gradually increase to 12%.

I recently did some part-time work, mostly at hourly rates and the 9.5% Super was on top of my stated rate of pay, not taken out of my stated pay before it got to my bank account.

At retirement Australians generally rely on their own retirement savings (Super), any voluntary investments they have made outside super (shares, managed funds, real estate) and government pension (welfare) we do not get social security payments based on what we have paid in through our employed life via a tax payment.

The increase in the Super rates is to increases retirees' self reliance, compulsory Super was brought in 1992 so most younger Aussies will accrue it over their entire working life and at least be able to fund a modest retirement. The government pension is a very basic amount (just above base wage) and getting harder to qualify for, hence the drive to self funding through Super.

« Last Edit: February 12, 2015, 07:18:36 AM by Sunnymo »

Cookie78

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #20 on: February 12, 2015, 08:24:26 AM »
Do you want security or do you want freedom?

^ Right on! I want freedom to plan my own life on my terms.

I'm feeling this way about my pension right now!

How so?

I'd just gone to the pension presentation and found out all the rules and restrictions. The money is taken out of my paycheck automatically (and matched 105% by my employer so I'm not honestly complaining), and I have no control over it or access to it. The positive thing is that it was forced retirement savings at a time when I wasn't bothering to contribute much on my own.

I've only been looking into it this week, but I found out if I quit this month and cashed it out I'd get $120,000 - 3/4 of which would be locked in a retirement fund until I was 50, and 1/4 of which would be taxed. If I quit this month and waited 29 years until I was 65 to get a pension, I'd get ~830/month.

Disclaimer: I'm not quitting this month, just looking into it now so I have an idea of what to expect when I retire early, hopefully in 5 years.

Sid Hoffman

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #21 on: February 12, 2015, 08:30:59 AM »
The big problem with "owned" retirement accounts is that - honestly - most people are bad with money.  The whole point of Social Security is that because you don't own it, you can't withdraw a ton of money early in retirement and thus have no money left for later in retirement.  It's a steady paycheck from month to month that will never run out no matter how long you live or what the stock market is doing.

How does the Australian system work?  What stops people from spending all their money in the first 10 (or 20) years of retirement and then going bankrupt and having no money left when they're 80+ years old?  That is the real risk that SS is supposed to address: nobody in America can outlive their SS payments, regardless of how long you live.

I did a little searching and can't find much on the subject, but what I did find is that Australia has Social Security too:

http://en.wikipedia.org/wiki/Superannuation_in_Australia#Effect_on_Taxable_income_and_Age_Pensions

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The Australian Government pays an Age Pension to people over 67 years old being $766 every two weeks for singles and $577.40 each for couples (as at 2014). This is reduced by 50% of any income over $160 every two weeks for singles or $284 for couples.

I am guessing that if you manage to blow your superannuation money, then you basically just fall back on your "Age Pension", which works out to about $20k year for singles and $30k for a couple.  That sounds comparable to people in middle to lower income ranges who rely in US Social Security, which is also using age 67 as full retirement age for people born after 1955 or something.

Kris

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Re: Workers in 18 countries enjoy greater retirement security than in the U.S.
« Reply #22 on: February 12, 2015, 09:42:27 AM »
The big problem with "owned" retirement accounts is that - honestly - most people are bad with money.  The whole point of Social Security is that because you don't own it, you can't withdraw a ton of money early in retirement and thus have no money left for later in retirement.  It's a steady paycheck from month to month that will never run out no matter how long you live or what the stock market is doing.



Yes.  Which is for everyone -- not just people who need the Social Security to survive.  It's a social good, that prevents mass poverty of our older population, thus greater social instability.

"Freedom" vs. "security" is a false binary.  Absolute freedom is anarchy.  Which brings with it absolute insecurity.  And a society with absolute insecurity, I would argue, is not one in which individuals as a whole would feel very free.
Please note: Libertarian4321 did not vote for either Hillary or Trump. He voted for Gary Johnson, who was the Libertarian candidate.