Comparing the lot of US retirees to their counterparts in other wealthy nations can be challenging, given differences in public and private benefit programs, the age at which citizens leave the workforce, and various pension reforms of recent years.
Generally, though, many economists view public retirement benefits in the United States as less generous than those in many other wealthy nations.
The gaps may be narrowing, though, as other countries — many of which have long had younger retirement ages — seek to adjust their systems.
“There’s a much richer support network in Europe than there is here,” says Jonathan Gruber, a professor at the Massachusetts Institute of Technology.
U.S. Social Security Insurancebenefits typically substitute less than half the income Americans earned on the job, while in Europe, similar benefits often account for at least two-thirds of pre-retirement income, says Gruber.
“We always are neck and neck with the U.K., but other than the U.K., I think we are among the stingiest,” adds Alicia Munnell, director of the Center for Retirement Research at Boston College.
U.S. support for retirees remains below the average for Organisation for Economic Cooperation and Development, OECD,member countries at every income level, she says Munnell.
U.S. Ranking in OECD Study
In addition, U.S. public pension spending amounted to 6 percent of gross domestic product in 2008, less than the 7 percent average for OECD countries.
National comparisons depend in part, however, on whether public or private pensions are considered, and on which aspects of retirement benefits are measured.
Among the 34 member OECD countries, the net replacement rate — retirement income as a percentage of pre-retirement income — for an average earner is 50 percent from public pensions alone, nearly 68 percent when mandatory private pensions are included, according to a 2011 OECD report.
The United States slightly trails the 50-percent average for public pensions only, at 47.3 percent, the report showed.