George Kamel - This Foreign Retirement Plan Could Change Your 401(k) Forever

Starting point is 00:00:05 Over half of millennials have more debt than retirement savings, and almost half of boomers have less than $100,000 in their nest egg. And if you think I forgot about Gen X, I did. It's a real problem, and the Trump administration is looking to our brothers and sisters in the Australian Bush for a solution. Seriously, back in December of 2025, Trump said his administration is looking very seriously at Australia's primary retirement savings program, calling it a good plan that has worked out very well. And in today's video, we'll answer three very important questions.

Starting point is 00:00:37 What is Australia's retirement program? Is it effective? And would it solve America's retirement crisis? Before we get into it, shout out to my homies and homieettes at Delete Me for sponsoring this channel. More on that to come. Let's start with that first question. What exactly is Australia's retirement program? Well, it's a system called superannuation, or super for short,

Starting point is 00:00:56 because annuation is simply, it's too much. It's doing the most. That's right, super. That's the name. A title usually reserved for men in blue tights and the guy who unclogs toilets at your apartment. Here's how it works. Each quarter, employers are required to put money into a retirement savings account for their employees. This applies even if the employee is part-time. That money is then invested into special funds called super funds, and it can't be taken out until the employee retires. Let's look at an example. We'll say our Aussie friend Robert makes $3,000 a month managing an outback steakhouse,

Starting point is 00:01:28 which I assume is one of the only restaurants they have in Australia. Why do you need more? You have it. You have it all. There will be four of us dining in the car this evening. For starters, Robert will get all of his $3,000 paycheck, minus whatever is withheld for taxes. On top of that, Outback will put an extra 12%, the minimum requirement, into his superannuation fund. That 12% comes out to $360. So over the course of a year, Robert would make $36,000, and Outback would put an extra $4,320 into his super. Pretty sweet, right?

Starting point is 00:02:02 Right? Right? Maybe. Well, that leads us to question number two. Is superannuation effective? I'll start by saying that super's do have at least some merit. In its 2025 annual global pension index, Mercer and the CFA Institute gave Australia's retirement system a B-plus. And that's compared to a C-plus for the U.S. And we cheated on the test.

Starting point is 00:02:25 That's embarrassing. Plus, you can't deny that it's way better than Social Security, which is America's favorite legalized Ponzi scheme, that may or may not exist for us. when we retire. Also, superannuation doesn't let you access your retirement funds early with extremely rare exception. And considering that in 2022, 13% of Americans with a 401k borrowed money from it, a policy like that in the U.S. would at least prevent a lot of self-sabotaging. We're talking millions of people robbing their future. At the same time, though, superannuation is far from perfect. In three key downsides, keep it from being a viable solution to America's retirement crisis.

Starting point is 00:03:00 Starting with downside number one. It would lead to low. wages. Superannuation sounds great on the surface, right? The government forces your employer to put money into your retirement for you. It's free money, right? Not exactly. Here's a tip. Anytime you see government and free money in the same sentence, you should find your nearest target and take cover behind one of the giant red balls. The reality here is that employers aren't going to magically come up with extra money to cover that cost. If they are forced to contribute 12% of your salary into a retirement account, that money has to come from somewhere. And most likely it'll come straight out of your paycheck in the form of lower wages. You see, companies only

Starting point is 00:03:35 have so much money budgeted for each employee. So odds are, they'll just redirect part of your compensation into your super instead of giving raises and bonuses. Which means you're not getting more money, you're just getting less of it now and more of it later. It's no more of a bonus than a tax refund, or when your wife makes a target return and claims she made money today. Nice try, Whitney. That's my wife, not a random woman, okay? That's my wife you're talking about. about. Wow, dude. Basic economics suggests that American super's would lead to tighter budgets in the present and slower wage growth over time. And I feel like it's already slow enough, guys. We don't need to make it any slower. Problem number two with superannuation, it takes

Starting point is 00:04:15 control out of your hands. Now, you do get to pick your investments within your Superfund, just like with a 401k, but beyond that, you're not the one driving the bus. You don't get to decide how much goes in on a base level. The government decided that for you, 12% of your If you wanted to use that money to help cover an emergency expense or pay off debt, you are S-O-L, which my homeschool friends tell me is short for. Sure out of luck. Bud? There was a close one. Now you might be thinking, but George, it's not actually part of your income.

Starting point is 00:04:47 You wouldn't get that money anyway. Where you've been, Bucco? Remember, this isn't a bonus. In the big picture, it's ultimately coming out of your total compensation package. Your financial plan needs flexibility, and supers don't give you that. It's a one-size-fits-all system that keeps rolling whether you want it to or not. And as a man with a smaller frame, let me tell you, one-size does not fit all. And I take offense to that.

Starting point is 00:05:09 I don't need to be putting on a trash bag with your one-size-fits-all onesie. I got to hand it to short people because they can never reach anything on their own. And by the way, if you need the government to force you to invest because it's the only way you'll consistently do it, you've got bigger fish to fry. It's like needing Mommy to put money into your piggy bank. Now, maybe at this point, you're still not convinced. Sure, the system isn't great, but it's still a better option than what we have here in America, right? Well, if that's what you're thinking, then this final con will definitely change your mind. First, I want you to answer this question.

Starting point is 00:05:41 If you could wave a magic wand and only have to pay $25 a month for your cell phone bill, would you do it? Of course you would, and that's exactly why I love Boost Mobile, a sponsor of today's video. Boost offers their unlimited plan with unlimited data, talk, and text for just $25 a month, no magic needed. And if you're trying to hit some money goals this year, this is a great way to give yourself a boost. And with 99% nationwide coverage, it's a deal you really can't afford to pass up. Plus, there's no contract required, and switching is super easy. So to make the switch and save big, head on over to boostmobile.com slash Ramsey, or click the link in the description. And while you're at it, you should also sign up for Delete Me, another one of today's sponsors.

Starting point is 00:06:19 There's no telling how many headaches Delete Me has saved me since I started using them a few years back. And that's because they constantly scour the internet and remove my personal data from hundreds of data broker sites before those sites get a chance to sell it to spammers and scammers. And that helps protect me from getting targeted from online scams and various spam. No thank you, ma'am. I also love that they send a customized report every few months, letting me know exactly what they've done and how much time they've saved me. And I'm currently up to over 100 hours saved.

Starting point is 00:06:46 So thank you. I've not spent that extra time wisely, but I wish I did. So if you want the same piece of mind, head over to join deleteme.com slash george and you'll get 20% off through annual plans or click the link in the description. Okay, third and final downside of superannuation. So fun to say. XB. Al-a lotches. It's not more effective than America's retirement system. Fans and stands of superannuation love to throw around stats that seemingly point to its stability and effectiveness. One of the most common? The fact that Australia's super funds are the fourth largest retirement savings pool in the world.

Starting point is 00:07:19 But the pastures don't seem quite so green when you look at the amount Aussies are actually retiring with compared to their American counterparts. Converted to US dollars, the average superannuation balance for Australian men, age 60 to 64, is about $255,000. For women, the number goes down to about $202,000. For comparison, the average 401K balance for Americans in that same age bracket is roughly $247,000, making the comparison between 401Ks and supers a wash. Which means the answer to our third question, would superannuation solve America's retirement crisis?

Starting point is 00:07:53 Is it resounding gnar, gnar, gnar, gnaar, gnaar. They'll pull one of those in my hand in post. Don't make me look stupid editors. You always do this. Implementing the system would ultimately lower wages, put unnecessary pressure on business owners, limit investors control, and leave the typical retiree stuck where they could. cracked nest egg. There's good news, though, because while it is true that your typical American doesn't have nearly enough save for retirement, that doesn't mean our system is broken. It means the behavior is. It means most people aren't saving as much as they should be. When you do consistently save for retirement and give compound growth enough time to do its thing, you'll have plenty of money

Starting point is 00:08:46 to live off when your working days are over. Let me show you what I mean using our free Ramsey retirement calculator. Now, for this example, we'll say you're a 30-year-old making $50,000 a year. So if you follow my advice of investing 15% of your income into retirement, that would be $625 going into your 401k every month. So let's plug the numbers in. Current age is 30. We're going to retire 65. We are starting with zero in retirement, and we're going to contribute $625 a month, and we're going to assume a 10% average annual rate of return. That's not every year, but on average, if you smooth it all out, 10% would be the number. Calculating. Come again? $2.37 million by the time you turn 65.

Starting point is 00:09:31 And that is if you don't have an employer match and you never get a raise for 35 years. Which at that point, what do you have been doing, dude, playing Angry Birds at your desk this whole time? It's not even relevant anymore. Gosh. But seriously, building real wealth for retirement doesn't take a magic strategy reserved only for the rich

Starting point is 00:09:49 and people with McDonald's gold card. You just need to follow three simple steps. First step, get out of debt and build margin. Before you can focus on building wealth, you need to eliminate what's keeping you broke. And for most people, that's debt. Debt payments rob you of your income, which is your most powerful wealth building tool. And that's why I always recommend getting rid of all consumer debt before you start investing a dime. I'm talking student loans, credit cards, car loans, personal loans, everything but your mortgage.

Starting point is 00:10:16 Now, once you're consumer debt free, build even more margin by saving three to six months of expenses in an emergency fund, so nothing trips you up from investing consistently for the rest of your life. At that point, you'll be ready for the next step. Automate your investing. Once you've got margin, it's time to put your money to work. And one of the biggest keys to doing that consistently is to automate your investments. Don't leave it up to chance or go, well, I guess I need to remember next month to invest some money. Set it up where the money you want to invest automatically comes out of your paycheck each month before you ever see it.

Starting point is 00:10:46 That way, you'll never miss it or forget it. You just learn how to live on what's left. So how much should you be investing? Well, like I mentioned earlier, I recommend putting aside 15% of your growth. household income each month into tax-advantaged retirement accounts. And finally, keep your foot on the gas. Just because you start investing doesn't mean the job is done. You got to keep throwing 15% at retirement every single month no matter what. And don't forget, since this is based on a percentage, the amount you're investing should go up as your income grows. 15% of 50 grand is not

Starting point is 00:11:17 as much as 15% of 100 grand. You should also have regular check-ins with an investing pro. They'll help you stay on track and make sure your investments are aligned with your goals. So I'll drop a link in the description below to the network of investing pros that I personally use. Bottom line here, investing works best when you're the one making the calls. And if you're wondering whether your retirement investments are on track, I made this video breaking down the average 401k balance by age. You can see how you stack up by clicking here or use the link in the description. That's it for today. Be sure to like this video and share it with an Australian friend, especially if that friend is Robert Irwin. Got to get them on the channel.

Starting point is 00:11:53 Come on, Robbie. Thanks for watching. We'll see you next time. Thank you.

George Kamel - This Foreign Retirement Plan Could Change Your 401(k) Forever

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.