In Sweden Welfare (=Välfärd) means in a broad sense standard of life. Welfare is everything that contributes to a good = well-fare (good journey) in life. It is also a systematic infrastructure to protect a good life, from a minimum up to (today) just about average (like ‘one size fits all’ or ‘black T-ford’).
Sweden has been categorised by some observers[who?] as a middle way between a capitalist economy and a socialist economy. Supporters of this system assert that Sweden has found a way of achieving high levels of social equality, without stifling entrepreneurialism. The perspective has been questioned by supporters of economic liberalization in Sweden.
Government pension payments are financed through an 18.5% pension tax on all taxed incomes in the country, which comes partly from a tax category called a public pension fee (7% on gross income), and 30% of a tax category called employer fees on salaries (which is 33% on a netted income). Since January 2001 the 18.5% is divided in two parts: 16% goes to current payments, and 2.5% goes into individual retirement accounts, which were introduced in 2001. Money saved and invested in government funds, and IRAs for future pension costs, are roughly 5 times annual government pension expenses (725/150).