Mandatory retirement funds

Discussion in Retirement Plans started by crimsonghost747 • Mar 5, 2014.

  1. crimsonghost747

    crimsonghost747Active Member

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    In some countries, it's mandatory to have a retirement fund. From each paycheck a certain percentage is automatically deducted and sent to the investment company responsible for your retirement fund. It's part of the social security system and therefore mandatory, there is no way to get out of it. What bothers me even more is that we have no choice what is done with our money, the companies can invest them as they see fit.

    How do you feel about such systems?
    I absolutely hate them! It's horrible to have someone else invest your money, especially since some of the investments they make are absolutely ridiculous and being an investor myself, I find it absolutely disasterous that people like that can be responsible for such large amounts of money. It's a political game just as much as it's an economical, and quite frankly I'd much rather invest the money myself. Obviously a lot of people don't regard investing as something an ordinary person can do (they see it as something that is only for the rich) so they are fine giving their money into someone elses hands, but I feel so idiotic giving it away to someone who I don't trust. I would much rather invest that money myself.
     
  2. Lostvalleyguy

    LostvalleyguyActive Member

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    We have C.P.P. (Canada Pension Plan) here which is deducted from paycheques and the self employed have to make a contribution as well. While I firmly believe that I could make better decisions with the money not everyone can. This at least provides some safety net for those who can't manage their own retirement. I don't know a lot of 18-22 year olds who put anything away in spite of my prodding.
    We are a continent of people who believe in instant gratification and because of that we need an adult in charge of our allowance.
     
  3. Denis Hard

    Denis HardWell-Known Member

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    Supposing someone works on contract, the person they work for has no right to deduct some money from the agreed sum so most of the time these people and those who have casual jobs don't benefit from these retirement plans.

    Nonetheless, I think it's an OK way for people to save money so that when they retire, they won't have to start from zero because not everyone can make wise investments.
     
  4. crimsonghost747

    crimsonghost747Active Member

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    Thank you for your comments. I get what you are saying, a lot of people wouldn't know or want to invest this money, I'm not really against the system itself.
    I'm against the way it's done. I am an investor and spend quite a lot of time reading about and studying different instruments and companies.. and the decisions made for me, for MY money, sometimes seem really idiotic.

    Why couldn't there be an option where, if the person wishes to do it, the money would be automatically transferred into his own retirement account where he could invest them as he sees fit? Obviously withdrawal from this account should be subject to the same rules as with these mandatory pension funds. People who don't know what they are doing would let the institutions take care of it, but people who do could profit a lot!
     
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