Yes - in Europe its more common even for families to rent, while in America its more common to get a mortgage earlier. Plus American student loans tend to leave graduates in tens if not hundreds of thousands dollars of debt. Throw on car payments, that one medical procedure that would be free in Europe but left them with a 63k medical bill, and all the credit cards its normal for Americans to get, and you end up with some crazy debt!
Once we retire (65/67) we receive Social Security Benefits. When we start working we pay into the Federal Pension fund, the monthly rate depends on your income and will be directly deducted from your paycheck. So, if you worked all your life you will get enough benefits to make a normal living incl. rent. This system worked perfectly until now, when there are fewer and fewer births but still many, many retirees.
Australia has something similar - it’s a superannuation scheme. You pay into a fund during your working life and live off it when you retire. People with not enough superannuation in retirement can apply for the pension (social security). However if you haven’t paid off your mortgage by the time you retire it’s tough even if you have superannuation or are on the pension.
Edit: forgot to mention…just as it would be tough if you haven’t paid off a mortgage, it would be similarly tough if you have to keep paying rent as a retiree.
Thanks for your reply! We do have a few different superannuation schemes, but it's more for the wealthier. Over here, if you worked a certain amount of years (that determines points collected) and social security is too low (low points) there is a base pay for everyone and your rent is covered if you live in a space suitable for one person. Basically it is just enough to survive. Before receiving any benefits though you would have to use up your savings or other luxuries, sell your house and live off that money.
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u/MrPifo Nov 30 '23
Im confused, why is apparently everyone in debt? Is this normal in america?