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Bloomberg \/ Contributor \/ Getty Images<\/p>\n
President Donald Trump has suggested the administration is looking into Australia’s Retirement Plan: here’s how their system works. <\/p>\n
The Trump administration is eyeing Australia\u2019s superannuation model as a potential method for the U.S.<\/p>\n<\/li>\n
Unlike the U.S., where many workers lack access to or don\u2019t participate in retirement plans, Australia mandates a 12% employer contribution, creating a far more robust retirement savings system.<\/p>\n<\/li>\n<\/ul>\n
The Trump administration is looking to Australia’s retirement system for inspiration.<\/p>\n
At a recent press conference, President Donald Trump indicated that his administration is examining Australia’s retirement system.<\/p>\n
“It [the Australian retirement savings plan] is a good plan and it’s worked out very well,” Trump remarked on Tuesday.<\/p>\n
The Australian retirement system differs markedly from the retirement system in the U.S. Here’s how they compare.<\/p>\n
Historically, retirement in the U.S. has been viewed as a\u00a0three-legged stool,<\/a> where retirees could rely on a pension, Social Security, and personal savings to finance their golden years.<\/p>\n However, as pensions have fallen out of vogue over the past few decades, workers increasingly have had to rely on their personal savings and Social Security benefits.<\/p>\n While the vast majority of Americans age 65 or older receive retirement or disability benefits from Social Security, access to workplace retirement plans still remains limited.<\/p>\n As of March, 70% of private sector workers had access to a defined contribution plan, like a 401(k), but only 50% actually participated. And employers aren’t legally required to contribute to workplace retirement plans either\u2014although employers can offer matching contributions.<\/p>\n Unlike America’s retirement system, Australia’s primary retirement program, known as superannuation, largely relies on employer contributions<\/a>, which reduces the pressure on individuals to save.<\/p>\n