Hello,
I’m a young student from Finland interested in finance and I’ve been lurking around this subreddit for a while. There's not much activity in the Finnish investment world compared to the US, as you might expect.
Here’s some (generalized) background for my question and the situation in Finland:
6,35 % of your salary is taken into a pension fund by a mandatory fee. For example, my salary goes into a fund which allocates 20% into short term bonds, 46% into stocks, 25% into real estate and 9% into “other”. You can start receiving pension at around the age of 65. According to the pension fund, if I keep working with my current salary (2300 €), the pension at 65 would be 1270€/month until death. The salary is set by an agreement between the employers and the worker’s union. The cost of living is around 1000-1500 €/month.
What, in general, is the system in the US? I’ve read that the employee is responsible for his own retirement, choosing their 401k or Roth IRA plan but is it 100 % or is there also some mandatory fee to pay into retirement funds? Do people mostly invest directly in stocks and bonds or do they favor mutual funds or ETFs?
Lastly, if you were in my situation, what would your allocation be? Some investment books in Finland quote the famous “100 minus your age to stocks and the rest into bonds” and some say that this mandatory pension fee makes the only logical move be to go 100 % stocks all the way.
Thank you!
Submitted May 23, 2018 at 02:15AM by Esomebrats https://ift.tt/2IHFQdh
