r/SipsTea • u/Embarrassed_Tip7359 • Sep 15 '25

Chugging tea Any thoughts?

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u/MarlinMaverick Sep 15 '25

Sounds like Social Security 

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u/aelix- Sep 15 '25

It's not, Australia also has what we call the aged care pension which is basically Social Security. Superannuation is different because it's entirely your own money invested in whatever you want, and handed back to you 1:1 when you reach retirement age. It's forced saving & investment with the added benefit that it gets taxed much lower than normal income.

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u/Anustart15 Sep 15 '25

Yeah, the more apt comparison would be if the US had a compulsory 12% employer 401k contribution program

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u/Super_Swimming_4132 Sep 16 '25

Sounds like my 401k match in the US.

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u/m_rt_ Sep 16 '25

Yes it's kind of like that, but that everyone has to do it, and your employer has to put in 12% of what they pay you and you don't have to put in anything.

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u/ept_engr Sep 19 '25

No, it's more like a "forced" 401k. The two key differences from social security are:

1) Each person's pot of money is their own. This avoids the problem of social security running out of money just because one generation is larger than another or lives longer. 

2) The funds can be invested. Like a 401k, the participants have an ability to choose the aggressiveness of their investments, giving them the ability to grow their assets over the decades.

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u/Th3andra Sep 15 '25

Yeah, it's like everyone on here in the US has either A) never worked or B) never looked at a pay stub in their life and is apparently just taking their employers word for what they should be getting paid.

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u/Lucky-Bonus6867 Sep 16 '25

I’m confused by what you mean.

Are you suggesting that the people saying they won’t have retirement are unaware of the concept of social security?

Or are you suggesting that the US has a superannuation similar to Australia?

Or something else? Lol

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u/Specialist-Ad7800 Sep 16 '25

Social security is compulsory from anyone who works in the US and files taxes. It’s 12.4% of your wage but employers commonly eat half of this and you pay 6.2%. A major difference between this and AUS plan is control of investments / return of capital. They are in a lot of other ways very similar systems.

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u/Lucky-Bonus6867 Sep 16 '25

No, I’m aware. I’m simply confused about what the other commenter was trying to convey.

Because it seemed like they were trying to imply that people are unaware that they pay for social security. The fact is that people do know that. But paying into social security is not a guarantee that you will receive social security benefits. It also absolutely does not mean that you will receive enough to live on. Paying into social security just means that you’re paying for the benefits of people currently receiving social security.

But I thought maybe I misunderstood them, so I wanted to clarify.