For the first time in a decade, nearly all developed countries in the
2023 Global Retirement Index released Wednesday by Natixis Investment Managers, including the U.S., received a higher overall score for retirement security over the previous year. The annual index shows improved economic conditions, mainly the result of employment growth, wage gains and interest rates. However, Natixis' research found that optimism at the macro level is not being felt in the everyday lives of retirees and working Americans. Forty-six percent of working respondents in a Natixis survey of working respondents in the U.S. feel
inflation is killing their dreams for retirement. Eighty-four percent, including 87% of retirees, said recent history has shown just how big a threat inflation is to their retirement security, devaluing their income and savings. At the same time, many Americans worry about the potential threat of reduced
Social Security benefits, which ranks as their top fear about retirement, the survey found. While 52% of working Americans foresee having the financial freedom to do what they want, when they want in retirement, 48% also expect to make tough choices and trade-offs. "As economies have rebounded from the global pandemic, employment and wages have increased but so has inflation, forcing central banks to boost interest rates,"
Liana Magner, head of retirement and institutional in the U.S. for Natixis, said in a statement. "It's a good news-bad news scenario for retirement security, and further underscores the complexity of the retirement funding challenge."
CoreData Research conducted the survey in March and April among 8,550 individual investors in 23 countries with at least $100,000 in investable assets, including 750 in the U.S.
Retirement Index Trends
The U.S. fell to 20th place from 18th in this year's annual ranking of retirement security among the 44 countries in the Natixis index. High inflation, steep public debt and a sharp decline in U.S. health scores offset improvements in employment and income inequality, pulling the country down on a relative basis compared to other countries in the index. Natixis created the GRI in collaboration with CoreData Research to establish a global benchmark that incorporates the wide variety of factors essential for people to enjoy a healthy and secure retirement. The GRI rankings are relative, not absolute, and based on an aggregate of mean scores from 0% to 100% for 18 performance measures in each of four subindexes — finances in retirement, material well being, health and quality of life — which researchers combine to provide an overall picture of the environment for retirees. The U.S. received an overall score of 71% in 2023, up from 69% in 2022. Here's how it scored for the four subindexes in the 2023 GRI compared with 2022:
- Finances in retirement: 67%, unchanged
- Material well being: 66%, up from 56%
- Quality of life: 72%, unchanged
- Health: 78%, down from 85%
See the gallery for the 15 best countries for retirement security, according to Natixis.
