When President Donald Trump told reporters on last week that he was looking "very strongly" at Australia's retirement system, most Americans probably shrugged and thought, "Great — another retirement plan."They shouldn't.If this idea becomes legislation, it could represent the biggest shift in American retirement policy since Social Security was signed into law in 1935.Don’t be surprised if the Trump name is on the retirement account if it happens.TRUMP LOOKING 'VERY STRONGLY' AT AUSTRALIA-STYLE RETIREMENT SYSTEM: 'TAKING THAT, MAKING IT SHARPER'The important thing to understand is this main point: Trump isn't talking about copying Australia.
He's talking about taking what works and making it "sharper" for America.So what exactly is he trying to accomplish?Our retirement system was built for an economy that barely exists anymore.People used to work for one employer for 30 years, receive a pension, collect Social Security, and retire.Social Security was built for people to claim it at 65 and live to about 70.
That’s gone.People are lucky if they work at the same company for five years, let alone 30, and pensions are nearly gone.
And we know the savings rate in America is an abysmal 2.6%.US HURTLING TOWARD POPULATION DECLINE EVEN AS AMERICANS SAY THEY WANT BIGGER FAMILIES, NEW REPORT WARNSToday, Americans change jobs every few years.Millions work as freelancers, independent contractors, Uber drivers, or for employers that don't even offer a 401(k).America has done an excellent job creating opportunities to save.
We haven't done a very good job making sure people actually do it.Meanwhile, too many workers have little or nothing saved for retirement.That's the backdrop for Trump's comments.Australia requires employers to contribute a percentage of an employee's wages into an individual retirement account known as a "Super."The worker owns the account.
The investments stay invested.The account follows the employee from job to job.The result?Australia has buil...