Personal Finance

The US is losing ground when it comes to retirement security

Key Points
  • The U.S. is falling further behind other countries.
  • Norway, Switzerland and Iceland rank highest on a global retirement security index.
The US is losing ground when it comes to retirement security
The US is losing ground when it comes to retirement security

All your retirement dreams can come true, just maybe not in the U.S.

Among the leading nations for retirement security, the United States didn't even crack the top 15, according to the 2017 Global Retirement Index by Natixis Global Asset Management.

Europe, however, continued to dominate the top spots, with Norway at No. 1 for the second year in a row, followed by Switzerland and Iceland. Sweden ranked No. 4 and New Zealand rounded out the top 5, Natixis reported.

The top 20 nations, along with their standing in last year's Global Retirement Index, are:

1. Norway (No. 1 in 2016)6. Australia (6)11. Canada (10)16. Czech Republic (18)
2. Switzerland (2)7. Germany (7)12. Finland (11)17. United States (14)
3. Iceland (3)8. Denmark (12)13. Austira (9)18. United Kingdom (17)
4. Sweden (5)9. Netherlands (8)14. Ireland (16)19. France (20)
5. New Zealand (4)10. Luxembourg (13)15. Belgium (15) 20. Israel (19)

Source: Source: Natixis Global Asset

With more retirees around the world responsible for their own financial security, the countries that ranked the best benefited from a combination of strong social programs, widely accessible health care and low levels of income inequality, according to Natixis.

Recent public spending in top-ranked Norway has bolstered the nation's pension plans, helped in part by the country's massive sovereign wealth fund. Other high-ranked countries, such as New Zealand and Australia, have universal, mandatory retirement savings plans.

Meanwhile, the United States slipped three spots to 17th for retirement security, according to the report.

Despite high per-capita income, stable financial institutions, low inflation, low unemployment and clean air, the U.S. also has one of the highest levels of income inequality among developed nations and a growing ratio of retirees to employment-age adults, which means there are fewer workers to support programs such as Social Security and Medicare.

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A little more than half of working-age households are at risk of being unable to maintain their current standard of living in retirement, according to the National Retirement Risk Index measurement from the Center for Retirement Research at Boston College.

As a result, many workers say they are expecting to work past age 70, if they retire at all. And as they approach retirement age, older Americans are becoming steadily more pessimistic about their future economic prospects, according to a separate study by United Income, a startup that aims to apply big-data analysis to financial planning.

As much as 88 percent of Americans agree that the nation faces a retirement crisis, according to one survey by the Washington, D.C.-based National Institute on Retirement Security pension research group.

Natixis examined access to financial services and quality health care as well as the ability to live comfortably in a clean, safe environment across 43 countries.