The United States narrowly holds its spot among the top 20 nations
globally in its capacity to meet retirement security needs and
expectations, according to the 2014 Global Retirement Index, published
today by Natixis Global Asset Management. The U.S. scored 19th among 150
nations analyzed, as the benefits of increasing U.S. economic stability
are moderated by the potential for rising interest rates and inflation,
as well as persistent income inequality.
“The responsibility for financial security in retirement is falling even
more heavily on individuals than ever before and this trend is likely to
continue as government resources become more scarce,” said John T.
Hailer, chief executive officer of Natixis Global Asset Management in
the Americas and Asia. “It is becoming increasingly apparent that to
ensure financial security in retirement, individuals need to set
personal goals and view planning and saving for retirement as a serious,
conscious and strategic pursuit."
The 2014 Global Retirement Index is based on an analysis by Natixis
Global Asset Management of 20 key trends across four broad categories:
Health and healthcare quality, personal income and finances, quality of
life and socio-economic factors. Together, these trends provide a
dynamic measure of the life conditions and wellbeing expected by
retirees and near-retirees.
The U.S. scored higher year over year in all four broad categories, yet
was surpassed by other nations trending higher in areas such as
healthcare and government debt. For overall retirement security, the
U.S. remains behind the majority of countries in Western Europe and
Canada, and ahead only of Israel on the list of the top 20 nations.
Despite ranking sixth highest in per capita income, the U.S. ranks first
in per capita healthcare expenditures, yet 33rd for life expectancy and
relatively low (81st) for income inequality.
Global Best Practices
“There is no one-size-fits-all solution to this serious, growing
retirement planning challenge,” said Hailer. “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 U.S., which need to shore up its retirement system.”
Many of the top countries in this year’s Retirement Index have
demonstrated a commitment to innovation and have emphasized simplicity
in their retirement scheme’s overall design and structure. Many also
have proactive governments that have shown a willingness to come
together and take bold policy stances in their ongoing efforts to
stabilize retirement security for their citizens.
The bottom line: Individuals, employers and government – the three legs
of the retirement savings stool in every nation – each have a key role
to play in improving the overall state of savings and security.
Individuals need to take a more proactive, personal role in planning and
saving; employers need to be more flexible and open to programs that can
broaden coverage (more than half of all U.S. workers still aren’t
covered by employer plans); and policymakers need to work together to
institute meaningful reforms that can help drive improvement. Asset
managers and financial advisors have key roles to play as well, through
education and innovation.
“Investors need to think of risk first as they set personal goals and
build durable, diversified portfolios,” said Hailer. “This approach can
help them manage short-term volatility while they pursue long-term
growth, and will help keep them invested through a variety of market
cycles in order to realize their full savings potential.”
The 2014 Global Leaders
Retirees in European countries enjoy the greatest financial security in
retirement, with eight of the top 10 places among the 150 nations.
Countries heading the global list include top-ranked Switzerland,
second-ranked Norway (last year’s no. 1), Austria, Sweden, Denmark,
Germany, Finland and Luxembourg. Australia and New Zealand are the only
non-European countries to break into the top 10 globally.
New Zealand, Iceland and the Republic of Korea are the most improved
performers in the top tier of the rankings, with each climbing at least
10 places from last year to enter the top 20. In contrast, Japan dropped
from the top 20, as did export-dependent European nations Slovenia and
Slovakia. The following table highlights the top 20 countries for 2014
and shows their ranking from last year.
|Natixis Global Retirement Index – Top 20 Nations for 2014|
1. Switzerland (ranked 2nd in 2013)
8. Finland (6)
15. France (10)
2. Norway (1)
9. New Zealand (22)
16. Czech Republic (17)
3. Austria (5)
10. Luxembourg (3)
17. Republic of Korea (27)
4. Sweden (4)
11. Iceland (23)
18. United Kingdom (20)
5. Australia (11)
12. Belgium (14)
19. United States (19)
6. Denmark (8)
13. Netherlands (7)
20. Israel (12)
7. Germany (9)
14. Canada (13)
For a more detailed overview of the Natixis Global Retirement Index,
including the rankings of all 150 nations evaluated, go to www.durableportfolios.com
The report was compiled by Natixis Global Asset Management
from CoreData Research
, a United Kingdom
-based financial research firm.
The report captured data from a variety of sources, including the
World Bank and United Nations
. The researchers calculated a mean score
in each category and combined the category scores for a final overall
ranking of the 150 nations studied. Categories measured include:
Health in Retirement Index (Life Expectancy at Birth Index;
Health Expenditure per-Capita Index; Physicians per 1,000 People
Index; Non-insured Health Expenditure Index; Hospital Beds Index);
Material Well-being in Retirement Index (Income per-Capita
Index; Income Equality Index; Unemployment Index);
Finances in Retirement Index (Investment Environment Index; Old
Age Dependency Index; Inflation Index; Interest Rate Index; Tax
Pressure Index; Bank Non-performing Loan Index; Government
Indebtedness Index; Institutional Strength Index.); and,
Quality of Life and Environmental Index (Happiness Index; Air
Pollution Index, Water Pollution Index, Biodiversity and Habitat Index
and Climate Change Index).
About Natixis Global Asset Management, S.A.
Natixis Global Asset Management, S.A. is one of the 15 largest asset
managers in the world based on assets under management.1 Its
affiliated asset management companies provide investment products that
seek to enhance and protect the wealth and retirement assets of both
institutional and individual investor clients. Its proprietary
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Headquartered in Paris and Boston, Natixis Global Asset Management,
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2012, according to Cerulli Associates.
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Source: Natixis Global Asset Management