The United States ranks 19th worldwide when it comes to retirement security, according to a new analysis of worldwide economic and other data. That's probably comes as no surprise to many Americans who are fretting about whether they’ll ever have enough money to stop working.
The Natixis Global Retirement Index puts U.S. retirees in a more precarious position than retirees in Western European countries including Norway, Switzerland and Germany, which have strong social programs providing health care and retiree benefits. But the analysis finds that the U.S. also lags countries including Israel, Japan, Slovenia and the Czech Republic.
On the other hand, we do rank better than the Brits, who came in at No. 20. And we’re apparently in much better shape than Zimbabawe, which placed dead last at 150th in the rankings.
Natixis, an asset management firm with $779 billion in assets under management, created the index using worldwide data from the World Bank, United Nations and other sources. The index weighed factors including health expenditures, life expectancy, income inequality, unemployment and the ratio of young workers to older retirees.
The list comes as more Americans are fretting about their retirement own security. A Pew report released last fall found that nearly 4 in 10 Americans are not very confident they’ll have enough money for retirement, a sharp increase over just a few years ago.
Fewer Americans are also now counting on retiring by age 65, a switch from a trend toward earlier retirement that lasted into the mid-1980s.
In the last several decades, many companies have moved from pension-type retirement plans to 401(k)-type plans that put more responsibility on individuals to save for their golden years.
Many Americans aren’t saving enough, and some people who did have retirement savings were forced to pull money from those plans during the recent recession. The Natixis study cited a Senate report released last summer showing that, in total, Americans have saved $6.6 trillion less than they should have at this point for retirement.
The recent run-up in the stock market has probably helped some Americans feel better about the state of their 401(k)s, but a bull market won’t be enough to make up the shortfall many Americans face.
The United States does have social safety nets in the form of Social Security and Medicare, which provide some monthly assistance and help to cover many health care expenses. But many other developed countries have much stronger safety nets that provide much more robust financial security.
“The message is clear: You will be call on to finance more of your retirement,” John Hailer, Natixis’s president and chief executive for the Americas and Asia, said in a statement.
Here are the top 20 nations in the Natixis retirement index.
17. Czech Republic
19. United States
20. United Kingdom