By law, do you have to save for retirement?

Question

In Australia, we have what is called Superannuation. The company you work for contributes 6% of your salary into a fund. This grows and you are not allowed to touch it until you are at the retirement age of 55-60 years old. Hopefully, you will then have enough to live off your superannuation. Is is the same in other countries?

Answer 1

Yes, in USA it's called Social Security and your company contributes to it for you. But it's not yours and there is no 'fund.' The government gives the money to other people in the meantime and otherwise generally wastes it all they want. You just get to pray that when you are retirement age you might get a little of what you put in. But don't count on it.

Answer 2

In America, there is no law that people have to save for retirement, but the government does encourage people to save. Depending on what kind of job you have, you may pay social security tax. These taxes are used to pay for people who are currently retiring. I worked at various jobs and I never seen a social security tax on my paycheck. So I guess I won't get social security when I retire.

There is no law that corporations have to have a retirement plan such as a 401(k), but if corporations want to retain employees, they will offer whatever benefits available to make employees happy. I guess your "Superannuation" is the same as the 401(k). When an employee contributes to the 401(k), the employer matches with whatever percent.

The investments in 401(k) grows tax-deferred and the employee may withdraw money from it anytime. However, if the employee withdraws money before age 59 1/2, he/she will pay income tax plus a 10% penalty tax. After age 59 1/2, he/she only owns income tax on withdrawals.

Answer 3

The United States has the Social Security system. Sounds very similar to your system. If you have contributed for 40 quarters, 10 years then you are eligble when you reach retirement age or when you become physically unable to work. Of course the longer you work the more your retirement income will be worth.

Answer 4

In the USA it's not law that we save for retirement, it's an option and highly recommended.

You can withdraw $ from your retirement account at any time, but you'll be taxed big time. Most people recommend you don't touch it until you reach retirement age.

Answer 5

In USA ur required to pay social security taxes, which is covering the old ppl now but will not be around at all for my generatoin ( im 26.) its really a total waste.

Answer 6

it is the same here in my country, malaysia and singaopre have got the same kind of thing. only the percent varies.
But frankly speaking i fully disagree .