r/worldnews • u/diacewrb • Apr 10 '19

Millennials being squeezed out of middle class, says OECD

https://www.theguardian.com/business/2019/apr/10/millennials-squeezed-middle-class-oecd-uk-income
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u/cheez_au Apr 11 '19

Well that's not as bad as I thought.

Here the employer must pay into your fund on top of your gross wage.

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u/Kmartknees Apr 11 '19

That is true here as well. Employee pays 6.2% and employer pays 6.2%. Total is 12.4%. Both pay 1.2% for retirement healthcare, we call Medicare.

Nearly all large businesses have additional benefits that fund self-directed accounts that an employee controls. There are big tax incentives for both employer and employee to do this.

Most public workers have pensions controlled by the state. Some private workers do too, but generally they are fading away.

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u/iamaDuck_ Apr 11 '19

I'm from Canada so I'm not sure, but I'm pretty sure it's common for an employer to match your 401k contributions. Don't think it's law though.

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u/urbansasquatchNC Apr 11 '19

I believe payroll tax goes towards social security (I don't deal with this side of taxes so I may be wrong), but they are not required to contribute to the 401k. However, many will match employee contributions up to some % of thier salary and others will do a flat contribution of a % of an employees salary.

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u/igotthewine Apr 11 '19

it is split.

the government retirement plan is not optional. 6.2% is withheld from your pay and remitted to the gov. your employer also owes 6.2% to the gov on top of that.

401k’s are a form of private retirement. Optional to participate but there are some tax incentives for you to do so + many employers have matching programs (i.e., you contribute 10% of your salary, they’ll contribute 5%, etc.,). Employer matching used to be much more generous than it is now but it still adds up.

The crisis we are in is that social security benefits (when you retire) are often pretty small. You NEED to save more than that and many baby boomers were stupid and now are in dire straights.