The man is out here trying to make sure every American, from newborns to boomers, has a secure financial future.
On Wednesday, Trump announced that his team is “very seriously” studying Australia’s famous “superannuation” system (or just “super” if you’re an Aussie local).
The basic idea is that very employer is forced to kick in 12% of your salary (that’s ON TOP of what they already pay you) into a private retirement account. That money grows tax-advantaged for decades, and you can’t touch it until retirement age.
And just like that… boom! Instant millionaire potential for millions of workers. 🎉
Trump loves it. “It’s a good plan. It’s worked out very well,” he said, adding it could even help reverse America’s plunging birthrate by giving families way more financial breathing room.
The numbers definitely back him up. Australia, a country of just 26 million people, has the fourth-largest pool of retirement savings on the planet – over $3 trillion. Meanwhile, half of American workers have zero retirement savings. So, yes, something’s gotta give.
What Is Superannuation Exactly?
Long story short, it’s basically a mandatory, 401(k) on steroids. Your boss has to put in 12% whether they like it or not (in Australia, it started off as 3%, then it’s been slowly climbing from 9% over the recent years and hits 12% fully next year).
On top of that, you can also toss in your own extra bucks if you want, pick your own investments (stocks, bonds, whatever), and the fees are crazy low compared to most other options — we’re talking 0.5-1% a year instead of 2-3%. 💰
Then, when you finally hit retirement age, the money is yours. At which point, you can take it as a lump sum, buy an income stream, or even mix and match. Most importantly, almost everyone is in the system — coverage in Australia is like 95%. AKA… no more “I forgot to save” excuses.
Is It Similar to Annuities?
A common question, especially since the name sounds so similar. But no, not even close.
Annuities are seen by many financial experts as the shady used-car salesmen of the retirement world — think loaded with sky-high fees, 10-year surrender penalties, and obscene commissions. 😕
Not to mention, you basically hand over a big check and pray the insurance company doesn’t screw you over.
Meanwhile, superannuation? It’s the opposite.
First, you never sign your life away to an insurance company. Second, your money stays in real investments you control (or at least a low-cost default fund controls for you). And finally, the growth is real, fees are tiny, and when you retire you still have flexibility — including the option to buy an annuity if you actually want one. Call it forced saving done right. ✅
The Future of Retirement?
Social Security is becoming sketchier by the year, most Americans are nowhere near ready for retirement, and the birthrate keeps sliding. So, a mandatory, portable, high-contribution system like Australia’s could genuinely move things ahead. And this might very well be a nice upgrade for what some see as America’s very outdated system.
Right now, this is all just talk and brainstorming, but we’ll definitely keep you updated if things start to move forward.
Overall, this sounds like a great plan. And we’re now curious if other Americans are on board with the idea as well.
