February 25, 2014

Top 20 Countries for Retirement Security: 2014

Despite improvements, the U.S. ranking in the Natixis index is not so hot

The United States was a straggler on Natixis Global Asset Management’s 2014 Global Retirement Index, despite improvement in each of the four categories measured by the report. Macroeconomic factors and improvements in other countries worked to keep the United States in the same position it held in the 2013 index.

“There is no one-size-fits-all solution to this serious, growing retirement planning challenge,” John Hailer, CEO of Natixis Global Asset Management in the Americas and Asia, said in a statement. “The optimal pension system for any country depends on a variety of economic, social, cultural and political factors. However, the policies and practices adopted in some regions that rate highly could hold valuable lessons for other nations, such as the United States, which need to shore up its retirement system.”

The index was compiled using data from multiple sources, including the World Bank, the United Nations, the World Health Organization and the Gallup World Poll. Natixis considered several topics as part of each category.

Per-capita health spending, life expectancy, access to care and uninsured health spending contributed to the health score. Per-capita income, income inequality and unemployment account for the material well-being category.

For the finance category, Natixis considered a country’s government indebtedness, old-age dependency, inflation, interest rates, taxation level and nonperforming loans from banks. Finally, the quality of life score was based on the level of happiness and satisfaction of a country’s citizens, and the quality of the climate and environment.

In health, the United States ranked 21st. Natixis noted that the country spends more on health care than any other nation, yet has a lower life expectancy than most advanced Western countries and limited access to care.

According to the report, the United States has the sixth highest per-capita income in the world, but income inequality and unemployment levels are keeping the country’s material well-being rank low at 36th.

Further depressing the United States' overall ranking is its score in the finances category, where it is among the 10 worst nations due to government debt. Inflation and interest rates are also keeping this score low, although Natixis said that the country is improving in the overall strength of financial institutions and tax pressure.

Ultimately, Americans are satisfied with their quality of life, Natixis found, but due to mixed reviews on environmental policies, it ranked 24th in this area.

Natixis said that countries in the top 10 scored well because they have innovative retirement schemes that are simple in their overall structure and proactive governments that work well with citizens. Natixis also noted the role asset managers and financial advisors can play in improving retirement outcomes through education and innovation.

Big Ben in London.

20. Israel (2013: 12)

19. United States (2013: 19)

18. United Kingdom (2013: 20)

17. Republic of Korea (2013: 27)

16. Czech Republic (2013: 17)

Eiffel Tower in Paris.

15. France (2013: 10)

14. Canada (2013: 13)

13. Netherlands (2013: 7)

12. Belgium (2013: 14)

11. Iceland (2013: 23)

Romerberg Square in Frankfurt, Germany.

10. Luxembourg (2013: 3)

9. New Zealand (2013: 22)

8. Finland (2013: 6)

7. Germany (2013: 9)

6. Denmark (2013: 8)

Geneva City, Switzerland.

5. Australia (2013: 11)

4. Sweden (2013: 4)

3. Austria (2013: 5)

2. Norway (2013: 1)

1. Switzerland (2013: 2)

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