Here's why the U.S. retirement system isn't among the world's best
The U.S. retirement system doesn't get high marks relative to other nations.
In fact, the U.S. got a C+ grade and ranked No. 29 out of 48 global pension systems in 2024, according to the annual Mercer CFA Institute Global Pension Index, released Tuesday. It analyzed both public and private sources of retirement funds, like Social Security and 401(k) plans.
A similar index compiled by Natixis Investment Management puts the U.S. at No. 22 out of 44 nations this year. Its position has declined from a decade ago, when it ranked No. 18.
«I think [a C+ grade] would describe a rating where there is a lot of room for improvement,» said Christine Mahoney, global retirement leader at Mercer, a consulting firm.
The Netherlands placed No. 1, followed by Iceland, Denmark and Israel, respectively, which all received «A» grades, according to Mercer. Singapore, Australia, Finland and Norway got a B+.
Fourteen nations — Chile, Sweden, the United Kingdom, Switzerland, Uruguay, New Zealand, Belgium, Mexico, Canada, Ireland, France, Germany, Croatia and Portugal — got a B.
Of course, retirement systems differ since they address a nation's unique economies, social and cultural norms, politics and history, according to the Mercer report. However, there are certain traits that can generally determine how well older citizens fare financially, the report found.
The U.S. system is often referred to as a three-legged stool, consisting of Social Security, workplace retirement plans and individual savings.
The lackluster standing by the U.S. in the world is largely due to a sizable gap in the share of people who have access to a workplace retirement plan, and for the ample opportunities for «leakage» of savings from accounts before retirement,
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