Forced savings

It is called forced saving to the one that is destined by means of a coercive power or law to cover now or in the future certain needs, currently depriving itself of making use of those funds for consumption.

Forced savings is what those resources are called that must be allocated to a function or need, generally intended to cover social and pension contributions. For example, social security contributions and contributions would be part of the forced savings, since the state or some organization obliges to allocate part of the personal resources to contribute in solidarity with social insurance.

Forced savings can be legal or voluntary, but with current restricted availability. Thus, legal would be all taxes (in reality, social contributions for tomorrow have a public pension) paid on the payroll, compensation and the like; while private forced savings are those products contracted either by the individual or a third party for the benefit of the former. For example, pension plans would be a product of forced savings since contributions are made to collect a rent in the future, but that nonetheless cannot be disposed of except in few and well-founded circumstances, as a situation of vulnerability.

Examples of forced savings

Another clear example is the compensation system of certain countries and companies , which contribute a part of their salary to a banking entity but which they may not have until retirement or in case of dismissal. This concept is known as an Austrian backpack.

A characteristic feature of this type of savings is that although the individual is obliged to make the contribution or a third party makes it for him, those resources are from his estate, no one withdraws the property if not the current usufruct.

Forced saving has been extended in recent years as a way to improve the conditions of the saved and workers so that they have resources in the future and do not remain in an impaired situation, while relieving organizations, public or private , high costs in case of early withdrawal.

In the case of public pensions, the savings are destined to when the person retires, to be entitled to a pension, although in practice it is a solidarity system in which current workers finance people who are already outside the labor market .

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