Is Retirement Security an Issue in the U.S.?

Is Retirement Security an Issue in the U.S.-


At one time, the United States was known for its retirement security. A recent survey however indicates that the U.S. is no longer even in the top 15 when it comes to retirement security. A number of things have led to the decrease-here’s what you need to know.

Survey Results

According to the 2017 Global Retirement Index published by Natixis Global Asset Management, the United States ranked #17 for retirement security. This was down three points over the previous year. For the second consecutive year, Norway ranked number one, followed by Switzerland and Iceland.

In calculating its results, Natixis looked at a number of criteria, including:

  • A retiree’s access to financial services such as banking
  • Quality of medical care
  • The ability to live safely and comfortably

Reasons for Top Rankings

Norway has the largest sovereign wealth fund in the world. One estimate values that fund at more than $960 billion. It is now bigger than Norway’s entire economy, amounting to approximately $185,000 for each of the country’s citizens. The fund is also well protected, as the Norwegian government may use only a small amount of the fund’s overall value.

While not in the top 3, New Zealand and Australia did rank in the top ten. Both of these countries have mandatory retirement savings plans to ensure people are financially secure during their golden years.

Reasons for U.S. Rankings

In the United States, the pool of working-age adults is decreasing at the same time the number of retirees is increasing. This means there are fewer workers paying into programs such as Medicare and Social Security.

An increased cost of living also means more Americans are planning to work past age 70; some may not even retire at all. This is partly out of necessity. It is estimated that nearly half of all households will be unable to sustain their current standard of living once they retire.

Americans are also holding onto their retirement funds longer. Recent data suggests that only 18 percent of those age 60 or over make withdrawal in any given year. The number of withdrawals also rise sharply after age 70 ½. That’s the age at which tax penalties are assessed on those who do not make required minimum distributions.

A study performed by United Income showed that adults who are nearing retirement age are becoming increasingly pessimistic about their financial future. This is true even as more senior adults are entering the workforce.

U.S. Advantages

While the study did uncover some negatives, it also revealed that the United States has many advantages for retirees. A few of those advantages include:

  • Relatively high per-capita income
  • A low unemployment rate
  • Low levels of inflation
  • Stable banking and financial institutions
  • Sound environmental policies that lead to clean air

Although the U.S. does have many economic advantages, nearly 88 percent of all Americans now believe they face a retirement crisis. Now more than ever, careful retirement planning is important for those who wish to enjoy life to the fullest once they stop working.