Anon - not logged in Report This Comment
Date: May 07, 2025 10:10PM

Good idea. Learn the lessons of the Australian experience:

The original scheme was you paid a set percentage of your wage/salary into your account and, if you voluntarily added to it, up to about the price of gold at the time, the government added an equal amount ("Co-contribution". This was for a financial year. You could add more if you like, but the government’s co-contribution limit is fixed. Your voluntary additions were after you paid tax. It's a good system. For a young person it's the best investment they can ever make.

A new Prime Minister, John Howard, from the so-called conservative party, mucked with the system to make it a tax dodge. After Howard's changes vast sums were suddenly being voluntarily contributed to superannuation accounts. Politicians of the other party are planning to tax the accounts. They're marxists and tax is what they understand. Or their default logic. But that's just complicating the system and should not be done. Undoing Howard's changes should be done.

Government makes regular surveys of the system and, apparently, one very large account balance is due to its owner not trusting their children with money. That their will sends the money to their children's superannuation accounts. Best to not get involved.

When you retire you sit down with a bureaucrat who calculates your expected income from all sources and what your old age pension will be:

1. Up to a set sum doesn't affect your old age pension.
2. For every [sum] dollars of expected income you lose [smaller sum] off your old age pension.

Between these two you have less meetings with bureaucrats and that saves money - as the paperwork isn't worth it.

The end result is, for example: a now retired receptionist I used to know and her husband (I don't know what his work was) calculated what their old age pension would be and didn't bother applying for it - it wasn't worth the effort.

Another result is Australia's cafe culture - the elderly have money to spend and a social life is good. The people you used to work with, members of clubs, relatives, whomever you feel like. This stops dramatically if they sense a stock market slump coming, as they save for bargains. At time of writing that's happening and a lot of cafe owners have noticed the sudden drop in business.

The long term effect is simple: if you pick people from every level of society and trace their ancestry ten generations, you'll find, for all of them, people who were high up in the world, people who were low down in the world, and people who were in the middle. You'll find people who were rising in the world, people who were dropping in the world and people coasting along.

In ten generations time, the number of people at the extremes of society's wealth should be tempered. Most poor people will have no fear of retirement, from their own accounts or inherited ones. Wealth is dissipated by inheritance.

(Our view of yanks is their default mentality is fear, or an incredibly stupid level of denial. Copying Australia's original Superannuation system, or Britain's Pension Fund system, will remove a broad amount of fear).

There will always be someone poor, due to accident, mistake, malice or stupidity. There will always be someone rich. The burden of bureaucracy, attempting to regulate this to universal equality, always brought down marxist systems.

Compulsory Superannuation/Pension systems also mean a dramatic rise in the number of financial transactions. We currently have banks disingenuously using the numbers to claim most people don't want to use cash, so therefore they shouldn't provide access to it.

Any other Australians want to add? There's also other countries like the United Kingdom, perhaps another image post and discussion?