The US ranks 17th among 43 countries on a 2017 index of retiree wellbeing across developed countries put together by Natixis Global Asset Management, sliding down from its number 14 rank for 2016.
The Boston asset management firm bases its rankings on 18 measures of retiree welfare across the four broader aspects of finances, health, material wellbeing, and quality of life.
The top-10 ranked countries on the Natixis retiree wellbeing index for 2017 include (in order of ranking) Norway, Switzerland, Iceland, Sweden, New Zealand, Australia, Germany, Denmark, the Netherlands, and Luxembourg.
The factors that impacted the US’s ranking are:
- The US ranks only 30th for life expectancy, even as it spends more per person on healthcare than any other country on the index, suggesting it is not getting a good return on the money spent.
- Although the country’s income per capita is fifth-highest, it has the sixth-lowest rank for income equality. This implies that many Americans are not participating in economic growth and could find saving for retirement a challenge.
- American retirees face a lower quality of life and decline in happiness levels, which was somewhat offset by an improvement in environmental factors, including cleaner air.
- Banks’ non-performing loans and levels of federal debt have improved compared to the other nations, landing the US in the top 10 for finances. Offsetting this was the high levels of public debt as a portion of GDP, as well as the rising proportion of retirees compared to working-age adults, which pressures welfare programs such as Social Security and Medicare. Low interest rates and tax pressures also impact retirement income and savings rates.
“This year’s global retirement index is an important reminder that retirement security is a complex, multi-dimensional issue that is vastly influenced by a nation’s policies, politics, and economics,” said Ed Farrington, executive vice president of retirement for Natixis Global Asset Management.
He added, “The population is getting older, making retirement security one of the most pressing social issues facing the world. Factors such as increasing longevity, income inequality, and the impact of monetary policy on personal savings and pension liabilities, are challenging the long-standing assumptions about how Americans plan for and live in retirement.”