US Remains 19th in Retirement Security Worldwide
The Global Retirement Index for 2014 was released this week and the United States just barely made it into the Top 20, coming in at number 19.
What is the Index?
The Global Retirement Index is a ranking published annually by Natixis Global Asset Management. The rankings represent a country’s capacity to meet retirement security needs and expectations. This is the second year in a row the United States has been ranked 19th of 150 countries worldwide, thanks majorly in part to rising interest rates and inflation.
John T. Hailer, chief executive officer of Natixis Global Asset Management in the Americas and Asia explained how, “The responsibility for financial security in retirement is falling even more heavily on individuals than ever before and this trend is likely to continue as government resources become more scarce. It is becoming increasingly apparent that to ensure financial security in retirement, individuals need to set personal goals and view planning and saving for retirement as a serious, conscious and strategic pursuit.”
Pre-retirees in America are facing mounting debt, which can be attributed to a number of factors, but most commonly home mortgages. Studies have found that Americans are extremely uninformed about the cost of retirement and most aren’t confident they will have enough saved to be able to live comfortably when the time comes to leave the workforce.
The ranking system is based on an analysis of 20 key trends across 4 broad categories: health and healthcare quality, personal income and finances, quality of life, and socio-economic factors. Though the United States scored higher this year in all 4 categories compared to last year, other countries ranked much higher, mainly due to their better trending health care and government debts.
The United States ranks 1st in health care expenditures per capita, meaning we spend more on healthcare than any other country. Despite this excessive spending, we rank 33rd for life expectancy.
Unfortunately, our modern culture of convenience eating like fast food, lack of exercise, and extremely high stress have led us to a number of diseases like the nation’s #1 killer, heart disease. We often end up spending absorbitant amounts of money to treat the symptoms of these diseases rather than opting for an healthy lifestyle to avoid them altogether in the first place.
In the top 5 of the Global Retirement Index are Switzerland, Norway, Austria, Sweden, and Australia, who also consistently rank as some of the healthiest countries in the world. The United States just barely made it into the top 20 for the second year in a row, so taking a hard look at the reasons for this might be beneficial to our nation as a whole.
“There is no one-size-fits-all solution to this serious, growing retirement planning challenge,” said Hailer. “The optimal pension system for any country depends on a variety of economic, social, cultural and political factors. However, the policies and practices adopted in some regions that rate highly could hold valuable lessons for other nations, such as the U.S., which need to shore up its retirement system.”