By Cyril Tuohy
For the third consecutive year, the U.S. came in 19th among 150 nations for retirement security, according to an annual survey of global retirement security.
European nations, with their high levels of social benefits and universal health care, were represented in abundance in the Top-20 group, which this year included newcomer Japan, the Natixis Global Retirement Index found.
Data used in the survey, which offers a snapshot of where the U.S. stands relative to other countries and their retirement programs, were supplied in part by the World Bank and the United Nations.
One of the factors holding the U.S. back from finishing higher in the rankings is that retirement security isn’t evenly distributed among the retiree population, the survey found.
Many Americans retire with millions of dollars and can afford golden years speckled with platinum, but many more barely scratch by on monthly Social Security payments and meager savings.
John Hailer, president and CEO for Natixis Global Asset Management in the Americas and Asia, said that, in the future, people will have to “shoulder more of the financial burden by saving and investing more effectively to ensure financial security in retirement.”
With the decline of corporate defined benefit programs, federal and state policymakers are looking at ways to expand choices available in defined contribution plans, and boost incentives for employers and employees to enroll in retirement plans.
The survey is based on an analysis of 20 trends in four categories: health care, material well-being, finances and quality of life.
For people who don’t set aside enough during their working years, a high quality of life in retirement is likely evaporate faster than a Las Vegas mirage. But even countries with secure retirement programs in place are facing big challenges, Hailer said.
“In the U.S., we need to open access to work-based retirement program so more Americans can put their money away for future needs,” Hailer said in a news release.
For now, as they have over the past three years, European countries lead the way in retirement security. However, they aren’t immune to the headwinds of people living longer and the higher costs necessary to pay for retirement programs to which people are entitled.
The survey found that Switzerland retained its No. 1 ranking because its high per-capita income, strong financial institutions and superior quality of life.
The biggest gainers in this year’s index were Iceland, which jumped seven steps to the No. 4 position due to the reforms implemented after that country’s financial crisis; the Netherlands, which rose eight spots to the No. 5 slot on better finances; and Japan, which leaped 10 steps to the No. 17 spot in the wake of fiscal reforms and better health care.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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