U.S. lags many peers on retirement security
Looking for a secure retirement? Might be best to look abroad.
An annual ranking of global retirement puts the U.S. in the middle of the pack, outpaced by countries like Switzerland, Iceland, Norway and Sweden. At No. 16, the U.S. did slightly better than its 2017 ranking and beat out the U.K., Malta, France and Japan.
The Natixis Global Retirement Index, which ranks 25 developed nations, gave the U.S. high marks for material well-being and its financial system. But declining life expectancy and high health care costs hurt the final ranking, the report found.
The U.S. “has the highest score for the health expenditure per capita indicator yet is in danger of being in the bottom ten for life expectancy,” the report found. “Meanwhile, the amount spent on healthcare per person for Chile, Czech Republic and Cyprus combined is less than two-thirds of what the US spends, yet all three of these countries have a higher life expectancy,” it continued.
Demographics, too, are not on America’s side.
“We’ve got the same problem the rest of the developed world has, which is an aging population. That means you have fewer younger people paying into retirement systems, and more older people taking money out,” said David Goodsell, executive director of Natixis Investment Managers’ Center for Investor Insight.
On the plus side, the U.S. unemployment rate is lower than in many other countries, and interest rates are increasing.
“Low interest rates are great if you’re buying a house or a car,” Goodsell said. “But if you’re trying to save for retirement, that eliminates the amount of return you can get.”
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