Demographics also weighs down on a healthcare system and maybe a few other things as well.

Yeah, they quadrupled the cost of ER visits here, from 5 EUR to 20 EUR, to stop people from going, as the system isn't doing too well. Supposedly one reason is that a lot of people go for no reason (which is funny because the stereotype is that an Estonian man doesn't get a single checkup unless his wife orders him to)

Anyway

I’m not a big fan of US American ideas about society but you have a good point with the 401k. The tax exemption is a nice idea. And I also think the current workforce shouldn’t pay for the current pensioners. It should be a fund and an investment.

Long ass rant incoming

We have something similar in Estonia tbh. Used to be mandatory for people born after a certain year, but now you can opt out and if you do you can't rejoin for 10 years which is even worse.

Essentially, 2% (now upgradable to 4 or 6 voluntarily) of your pre-tax salary goes to a fund of your choice, and the government puts in another 4% (comes from your own social tax - if you opt out of the system, your employer pays 4 percentage points less social tax).

The conservatives delivered on their promise of bringing everyone freedom and making the formerly mandatory fund opt-out, so 23% of people who had those funds, withdrew everything immediately (you can withdraw 3 times a year and 152k people aka 23% of people this affected, did so in the first withdrawal period). By now it's over 250k withdrawals. What effect did this have on society? Well, property prices that already rose during covid, rose even more obviously as a lot of people used newly unlocked funds to make a down payment on a mortgage (understandable use case tbh). Secondly, it means that in the future, all these people are dependent entirely on the national pension system, so either they're completely fucked, or we're going to have to start collecting more money off the people who DO work.

Personally I plug my numbers into my bank's pension prognosis calculator and assume there's a 6% rate of returns (low for a composite fund consisting of multiple index ETFs I'd say) and I maximize my contribution at 6%, it tells me more than half my eventual pension is going to be from the now-voluntary fund, called the "second pillar". The first pillar, or national pension, contributes less than half. This is based on the assumption that the national pension keeps rising at the same rate as it has been.

If I were to choose to max out tax-free contributions into the third pillar as well (this one has no government matching, but does come with deferred taxation (you get to claim back on your tax return) and once you're old enough, you get to withdraw the funds with a smaller income tax rate, or get monthly payouts, also with smaller income tax rate), that would actually overshadow the prognosis for the second pillar, making the national pension less than 30% of my total pension. Assume a 10% return (average long term return of the S&P 500 for an example), and my prognosis is 8x that of the national (first pillar) pension prognosis.

So the question is, how are the people who get a third or less of what I should theoretically get, going to live? Am I going to have to pay more taxes out of my pension to fund those who volunteered out of a system where they were going to get tax-free investments with free government matching?

With forced investments, I feel we literally were going to have close to the best of both worlds: Universal coverage AND self-funded retirement.

The constitution says that everyone HAS to be guaranteed a retirement, so either the young are going to pay significantly more tax (disguised as "employer-paid" taxes of course), or our retirees will live on scraps. All because the conservatives delivered on their populist promise of letting people live better today at the expense of tomorrow.

All those prognoses are of course only predictions based on 1) national pensions rising, 2) my salary rising (the model actually uses a smaller YoY raise than I normally get in my career), 3) global stockmarkets not going to absolute shit. So it could all go wrong and maybe my retirement will also be worth nothing. But just in case, I shifted my funds to one that includes more EU based ETFs and fewer US based ones.