I think about finances often... but because of student loans, I was never really able to focus on my retirement until now. I am 25, opened up a retirement account, and I have just started contributing to it.
Do you have a retirement account? Why or why not?
Most Helpful Girl
Yes but there isn't much in it.0
Most Helpful Guy
Yes, I do. It's mandatory in my country. The pension system where I live is based on three "pillars" as we call them. The first and the second are mandatory, the third one is optional. The first pillar is the national pension. In my country, the retirement age is 65 for men and 64 for women. Anyone between the age of 18 and 64/65 has to pay taxes regardless of whether you're employed or a student etc.. One part of your taxes go into a national pension fund (like a big pot). From this fund, every retired person gets an equal share (personal factors don't play a role). I think at the moment it's 700 or 800 dollars a month. This first pillar is based on solidarity, so people who earn more money also have to pay more taxes and thus help people with less money. The second pillar is the work pension. If you have a job, your boss is obligated to cut off a certain amount of money from your salary every month and pay it into a closed account that you can't open before your retirement. If you are self-employed, you have to do this too, you just have to do it for yourself instead of a boss doing it for you. The difference to the first pillar is that the money you'll have from this account per month depends on your personal situation, namely how many years you've worked and in what job. Obviously, the more you earn, the more money goes into the pension account (the percentage is the same for everyone but 5% of 6,000 dollars is not the same as 5% of 15,000 dollars). I think usually, the work pension ends up being at least 2-2,5 times the amount per month of the national pension once you're retired. So rather poor people will have a pension of maybe 2,500 bucks per month with the first and second pillar together. In Switzerland, that's not a lot of money. Finally, the third pillar is the non-mandatory one. This is basically just plain old saving money. You can open your own savings account and deposit money there whenever you feel like and as little or much as you want. Many people do that but there are also poor people who barely make ends meet and can't put any money on the side no matter how hard they work. This is why we have a national pension.0