The purpose of this paper is to analyze the retirement policy trends in America and Sweden, while comparing their strengths and weaknesses in order to decide which country’s retirement system has the best policy. Retirement planning covers a broad range of clients and it includes determining the client’s goals and objectives in order to successfully assess the client’s financial needs at retirement. Therefore, as a financial planner, we must help our clients establish a plan that is tailored to meet their financial needs. Each country has been built upon a different foundation and they all differ on how they approach retirement.
Policy Trends in America
The retirement system in America consists of three main options; Social Security, qualified …show more content…
These individual accounts allow the employee to deduct either $5,500 or $6,500, if they are over 50 into their individual retirement account. Traditional IRA’s are tax deferred and Roth IRA’s are tax free.
When looking at the United States retirement system, there are a few strengths and weaknesses. One strength of the retirement system is that it offers citizens an incentive to contribute because of the tax treatment of their retirement plans. Additionally, the retirement system offers a good selection of investment options through various plans. As a result, the retirement system promotes independence in which it allows citizens to have a say in their future.
In addition to the strengths, there are also weaknesses that may prevent citizens from taking advantage of the retirement system. One weakness is that some citizens rely too heavily on Social Security and it is their only source of income after retirement. Another weakness is that the government has proposed to remove or reduce tax incentives for retirement plans (“American Views,” 2015. pg. 2 ¶ 7). This would restrict individuals from making their own …show more content…
The purpose of providing a guaranteed pension is to prevent a worker’s pension income from falling below the minimum amount because of their low earnings (Barr, 2013. pg. 38 ¶ 1). A single retiree may receive $9,000 per year and a married couple may receive $16,000 per year through a guaranteed pension (Normann & Mitchell, 2000. pg. 5 ¶ 6).
When looking at Sweden’s retirement system, there are a few strengths and weaknesses. One strength is that there is a greater incentive to work because Sweden’s pensions are based off of a worker’s lifetime income (Normann & Mitchell, 2000. pg. 6 ¶ 3). Lastly, the new retirement system offers more retirement income than the previous retirement system offered (Normann & Mitchell, 2000. pg. 7 ¶ 3).
While Sweden’s retirement system shows favorable strengths, there are also weaknesses that can prohibit the retirement system from growing. One weakness is that Sweden’s retirement system is fairly new. Second, the newly reformed retirement system provides workers with many investment options through the premium pension, which may affect future benefits that are paid out to workers (Barr, 2013. pg. 14 ¶ 8).
Policy Trends in America
The retirement system in America consists of three main options; Social Security, qualified …show more content…
These individual accounts allow the employee to deduct either $5,500 or $6,500, if they are over 50 into their individual retirement account. Traditional IRA’s are tax deferred and Roth IRA’s are tax free.
When looking at the United States retirement system, there are a few strengths and weaknesses. One strength of the retirement system is that it offers citizens an incentive to contribute because of the tax treatment of their retirement plans. Additionally, the retirement system offers a good selection of investment options through various plans. As a result, the retirement system promotes independence in which it allows citizens to have a say in their future.
In addition to the strengths, there are also weaknesses that may prevent citizens from taking advantage of the retirement system. One weakness is that some citizens rely too heavily on Social Security and it is their only source of income after retirement. Another weakness is that the government has proposed to remove or reduce tax incentives for retirement plans (“American Views,” 2015. pg. 2 ¶ 7). This would restrict individuals from making their own …show more content…
The purpose of providing a guaranteed pension is to prevent a worker’s pension income from falling below the minimum amount because of their low earnings (Barr, 2013. pg. 38 ¶ 1). A single retiree may receive $9,000 per year and a married couple may receive $16,000 per year through a guaranteed pension (Normann & Mitchell, 2000. pg. 5 ¶ 6).
When looking at Sweden’s retirement system, there are a few strengths and weaknesses. One strength is that there is a greater incentive to work because Sweden’s pensions are based off of a worker’s lifetime income (Normann & Mitchell, 2000. pg. 6 ¶ 3). Lastly, the new retirement system offers more retirement income than the previous retirement system offered (Normann & Mitchell, 2000. pg. 7 ¶ 3).
While Sweden’s retirement system shows favorable strengths, there are also weaknesses that can prohibit the retirement system from growing. One weakness is that Sweden’s retirement system is fairly new. Second, the newly reformed retirement system provides workers with many investment options through the premium pension, which may affect future benefits that are paid out to workers (Barr, 2013. pg. 14 ¶ 8).