Comparative Analysis of Retirement Plan: USA vs Bangladesh

Abstract

This report provides a comparative analysis of the retirement plans in the United States and Bangladesh, focusing on the differences in structure, regulation, and effectiveness. It aims to highlight the well-established nature of the U.S. retirement system and how Bangladesh's retirement sector remains relatively underdeveloped and unstructured. The report begins with an overview of the retirement process in the United States. U.S. retirement policies are highly regarded due to their distinct features, which make them widely adopted by both government and private sectors, including sole proprietorships. These policies are popular due to several factors: strong governmental regulations, public desire to save for retirement, transparency regarding individuals' rights, and contributions to both the national and local economies. The U.S. government has made significant efforts to protect the financial security of retirees, with agencies like the Internal Revenue Service (IRS) and the Department of Labor (DOL) providing clear guidelines for employers managing retirement benefit plans. These regulations also allow employers to benefit from tax savings on business profits. The second section of the report examines Bangladesh’s retirement industry. In contrast to the U.S., retirement systems in Bangladesh, whether in the public or private sector remain largely unstructured and unregulated. There is no comprehensive system for retirement benefits such as gratuity, benevolent funds, government housing, or group insurance. This lack of organization and regulatory framework has resulted in an unreliable and ineffective retirement provision system. The third section compares the retirement policies of the two countries, identifying key differences such as government involvement, citizens’ rights, economic contributions, dependency rates, and the scale of benefits provided. In conclusion, the report offers several recommendations for improving Bangladesh’s retirement system. These include the need for a more structured policy, greater governmental attention to retirees' financial security, and reforms to enhance transparency and reliability in retirement benefit provisions.