We’re No. 16! We’re No. 16! The United States nudged up one spot to No. 16 among 43 countries in the 2018 Global Retirement Index from Natixis.
The modest rise in the U.S. ranking is attributed to improving economic conditions and financial institutional strength, according to the investment management firm.
However, 10 years after the global financial crisis, Natixis points to a “confluence of factors”—ultra-low interest rates, growing levels of public debt, aging populations and human longevity—as indicators for the ongoing sustainability of retirement systems in the U.S. and around the world.
“Global retirement security is facing a multi-dimensional problem, as the traditional three-pillar funding model is challenged by 21st Century demographics, fiscal imbalances and monetary policies that are straining the resources of individuals, employers and governments around the world,” Jean Raby, CEO of Natixis Investment Managers, said in a statement. “We hope this report will serve as a framework for much-needed dialogue among policymakers, pension managers, workers and the financial industry about how to meet the needs of today’s retirees while preserving retirement security for future generations.”
An overall score for each country is based on an examination of 18 factors across four broad categories: Finances in Retirement, Material Wellbeing, Quality of Life and Health.
Top Performers
Western Europe continues to dominate the top 10 countries in the 2018 index, including:
- Switzerland
- Iceland
- Norway
- Sweden
- New Zealand
- Australia
- Ireland
- Denmark
- Canada
- Netherlands
Ireland enters the top 10 for the first time, climbing from 14th last year, which is the largest jump in both rankings and score of all countries. Ireland’s ability to cut its unemployment rate to 6.2 percent as of 2017, and subsequently reduce income inequality, contributed to its rise in the index.
It also boasts a significant improvement in tax pressure, and thus an increase in the level of disposable income of retirees.
Canada returned to the top 10 mainly because of improvements in the biodiversity, air quality and environmental factors indicators within the Quality of Life sub-index. It has the second-highest air quality and seventh-highest personal happiness scores in the entire Index.
In the Material Wellbeing category, Canada’s unemployment indicator improved as the country benefited from a stronger jobs market in 2017.
“This year the countries in the top 10 all benefit from three strong main factors: their social programs, widely accessible healthcare and low levels of income inequality,” added Ed Farrington, Executive Vice President of Retirement Strategies at Natixis Investment Managers. “That said, none of the countries are entirely immune to the challenges that are associated with an aging population, strained government resources and a pension crisis. Today’s stakeholders need to reevaluate old assumptions so that we can ensure individuals can live securely in the years following their retirement.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
