President Donald Trump revealed on Monday that his administration is working on establishing federal savings accounts similar to the ones used in Australia’s three-pillar model retirement system.
In Australia, the retirement system includes an old-age pension that’s mean-tested, mandatory private retirement savings, and voluntary savings (optional investments, home ownership, etc.).
“I made reference today that Australia has a thing going that’s very good – it’s really worked out very well,” the president said during a Rose Garden lunch Monday while promoting his “Trump accounts” for kids, according to Fox Business.
“We’re looking at that very strongly. We’re going to be taking that, and we’re going to be maybe making it a little bit sharper, a little bit even better. But we’re going to be doing that,” he added.
The president further said these new accounts would be like the “Trump accounts” for kids, except “more for grown-ups.”
According to Fox Business, Australia’s retirement system centers around “superannuation,” which the network describes as “a mandatory savings program that requires employers to contribute 12% of a worker’s ordinary earnings into tax-favored retirement accounts managed largely by private funds.”
(Video Credit: AustraliaSuper)
According to The Hill, the president first expressed interest in this plan while speaking at a press conference in December.
“There’s a certain Australian plan that people are liking,” he said at the time. “There’s a plan where, not for children necessarily, but for people, working people, and we are looking at other things different from this. I think this is very unique, but different from this, but very important.”
Matthew Linden, the executive general manager of strategy and insights at Super Members Council, has also praised this model.
“What has struck US officials and investors is how the strength of Australia’s super system policy settings — automatic super payments, near universal coverage and preservation of savings until retirement — have helped Australians grow world-leading retirement nest eggs,” he said in February, according to CNN.
After the president’s remarks, the Center for Retirement Research at Boston College published a report comparing Australia’s system, which is ranked B+, with America’s system, which is ranked C+.
“The U.S. system is just the inverse of the Australian system,” according to the Center. “While Australia’s basic plan is the Superannuation defined contribution system set up in 1992 and managed by the private sector, our basic plan is the defined benefit Social Security program established in 1935 and operated by the federal government.”
“Australia then backfills shortfalls in retirement income with means-tested payments from the Age Pension, while we rely on favorable tax provisions to encourage workers to send additional amounts through workplace retirement plans,” the Center notes.
The problem with the U.S. system is that Social Security is going bankrupt. An annual Social Security report published by the Trump administration last month found that Social Security will be fully solvent only until 2032.
“The Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay 100 percent of total scheduled benefits until the fourth quarter of 2032, one quarter earlier than projected last year,” the report read. “At that time, the fund’s reserves will become depleted, and continuing program income will be sufficient to pay 78 percent of total scheduled benefits.”
In other words, Social Security’s inevitable insolvency is now a year closer than before — and not just because another year has passed.
Is everyone paying attention? We have just SIX YEARS before Social Security is insolvent.
Congress needs to stop burning money on fraud and crappy programs, balance the budget, and PROTECT Social Security so we can keep our promises to American seniors. pic.twitter.com/rZPB707mSy
— Rick Scott (@SenRickScott) June 9, 2026
However, the left-wing Cato Institute has warned that adopting Australia’s approach would mean taking more money from people’s paychecks.
“Compelling American workers to save on top of existing payroll taxes would displace voluntary savings and disproportionately harm low-income workers,” the institute notes.
The other option would be to divert a portion of payroll taxes into individual accounts. The problem with this is it’d skyrocket the debt and increase Social Security’s shortfall.
“[D]iverting half of payroll taxes into individual accounts would increase Social Security’s 30-year shortfall by $50 trillion, exacerbating the already-dismal fiscal outlook and accelerating a debt crisis,” according to the Institute.
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V. Saxena is a staff writer with a decade of experience as a professional writer, and a lifetime of experience as an avid news junkie. He holds a degree in computer technology from Purdue University. Saxena also contributes to BizPac Review.
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