41% of Americans say it's 'going to take a miracle' to be ready for retirement, report finds
- The Covid pandemic has taken a hefty toll on retirement security in the U.S.
- A new ranking takes a look at which countries are faring better, based on material wellbeing, quality of life and access to good financial and health services.
Retirement is looking less and less like a given, at least in the United States.
Overall, 59% of Americans said they accept that they will have to keep working longer, while 36% now believe that they will never have enough money to be able to retire, according to the latest data from the Natixis Global Retirement Index.
Even more — roughly 41% — said their ability to be financially secure in retirement is "going to take a miracle," the report found.
The Covid pandemic has taken a heavy toll on Americans' feelings about their own retirement security.
Among the top concerns is how significant increases in government spending to get the economy back on track will lead to decreases in Social Security benefits.
Already, the Treasury Department said the Social Security trust fund most Americans rely on for their retirement will run out of money sooner than expected.
The outlook, aggravated by the pandemic, also threatens to shrink retirement payments and increase health-care costs for older Americans.
At the same time, the pandemic set retirement savers back, especially younger workers.
About 13% of Generation Y decreased their retirement plan contributions and 11% withdrew money from their retirement accounts to make ends meet, the Natixis report found.
Among Generation X, 15% reduced their retirement plan contributions and 9% took a withdrawal.
Low interest rates and higher inflation pose additional problems for long-term financial security, according to Natixis, which polled 750 individual investors.
"People are really aware of the critical risks they are facing, and they've all been exacerbated by the pandemic," said Dave Goodsell, executive director at Natixis' Center for Investor Insight.
The U.S. is losing ground
Natixis' annual ranking compares countries based on the finances, material well-being, health and quality of life they offer in retirement.
This year, the U.S. fell one spot to number 17 out of 44 countries.
Compared to 2020, the U.S. scored lower in three of the four categories, including health, quality of life and finances, mostly due to a shortened life expectancy, lower ratings on overall happiness and the environment as well as higher levels of government debt.
These countries top the U.S.
Iceland had the highest ranking overall for the third year in a row. Switzerland, Norway, Ireland, Netherlands, New Zealand and Australia all slipped slightly in retirement readiness but still maintained top spots, while Germany, Denmark and Canada rounded out the top 10.
With more retirees around the world responsible for their own financial security, the countries that ranked the best struck a balance with low levels of income inequality, available health care and strong social programs, according to Goodsell.
Natixis' index includes advanced economies in the International Monetary Fund, members of the Organization for Economic Cooperation and Development and the BRIC countries (Brazil, Russia, India and China).
Countries are given a score in each category and the combined scores determine a final overall ranking for the 44 nations included.