Looking for a safe haven for retirement? The world's top five  countries for a secure retirement lie in Europe, according to the 2017 Global Retirement Index developed by Natixis Global Asset Management and CoreData Research. In fact, Northern Europe dominates the top 10, with eight entries.

Those eight countries are: Norway (1), Switzerland (2), Iceland (3), Sweden (4), Germany (7), Denmark (8), Netherlands (9) and Luxembourg (10).

The two non-European nations in the top ten are New Zealand (5) and Australia (6).

Retirement Security DefinedSource: Natixis Global Asset Management

So what is it that makes retirement "secure?" Natixis Global Asset Management, which has compiled the index for five years, describes its Global Retirement Index (GRI) as  “multidimensional,” incorporating 18 performance indicators that are grouped into four sub-indices: Health, Finances in Retirement, Quality of Life and Material Wellbeing.

The performance indicators, Natixis says, measure everything from inflation to tax pressure, happiness to air quality, life expectancy to health expenditures – as well as income equality and unemployment.

Changes to Methodology

In order to improve the index, Natixis made two substantial changes in methodology last year. First, it changed to a five-year average of real interest rates and inflation in order to provide a longer-term perspective regarding those two variables.

Second, the list of countries was significantly reduced from 150 to 43. According to Natixis, the shorter country list allows for a more specific focus on issues faced by retirement systems around the globe.

What About the U.S?

When it comes to retirement security, among leading nations in the world, the United States is not in the top five, let alone the top ten. The U.S. ranks 17th worldwide for 2017.

America’s 17th place finish was a drop from 14th place last year.

Why the U.S. Falls Short

The United States benefits from high per-capita income, stable financial institutions, low inflation and low unemployment. Those factors, however, cannot overcome the negatives.

According to Natixis, the outcome highlights a growing number of retirees now supported by a smaller number of working adults. It also highlights a lagging life expectancy, a growing gap in economic opportunity, a high public debt-to-GDP ratio and that American retirees are simply less happy as factors to in the downgrade.

In simple terms, too many older people do not have sufficient retirement savings and there are not enough workers paying into Social Security and Medicare to support those programs long-term.

 

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