U.S. lags globally on retirement due to health, quality of life issues

investmentnews.com:

The U.S. lags 19 other countries on retirement security — putting it just behind Belgium and ahead of South Korea — despite recent initiatives designed to help expand plan access and encourage workers to save more.

The country’s relatively low ranking among other wealthy nations is down two positions from last year, due in part to rising inflation and government debt and lower life expectancy, according to Natixis Investment Managers, which Wednesday issued its annual Global Retirement Index.

Across the world, however, “the data presents reasons for renewed optimism about retirement security,” the report noted. “The pandemic is fading in the rearview mirror, inflation is easing in North America and Europe, central bank moves have boosted interest rates, unemployment in key markets is at or near historic lows,” and most countries saw higher scores on retirement.

“The U.S. retirement system is built on shaky foundations — retirement accounts are voluntary, which means that most workers and firms don’t contribute, and the commercialized and individualized nature of the accounts means that it is administratively expensive and poorly allocated,” labor economist Teresa Ghilarducci, professor at The New School for Social Research and director of the Schwartz Center for Economic Policy Analysis, said in an email.

The countries with the best grades for retirement security — Norway, Switzerland, Iceland and Ireland — retained the same ranks they saw in Natixis’ report last year. Themes in those countries were high marks for health, quality of life and material well-being.

Those three categories, in addition to finances in retirement, are used to assess the overall retirement security for each country, according to Natixis, which