15 Best Countries for Retirement Security: 2024
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Retirement conditions held steady this year after nearly all developed countries experienced improvements in retirement security in 2023, according to the Global Retirement Index from Natixis Investment Managers, released this week.
The top performers delivered more consistent ranking across all sub-indexes, showing a stabilizing global retirement outlook, Natixis IM said. The index’s top 10 countries remained the same for a second consecutive year.
The Global Retirement Index, which was created in collaboration with Core Data Research, provides a benchmark that incorporates numerous factors essential for people to enjoy a healthy and secure retirement across 44 countries. These include both important financial factors and considerations such as access to and cost of health care, climate conditions, the state of governance and the general happiness of the population.
The GRI rankings are relative, not absolute, and are based on an aggregate of mean scores from 0% to 100% for 18 performance measures in each of its four sub-indexes — finances in retirement, material well-being, health and quality of life — which are combined to provide an overall picture of the environment for retirees.
Flying Solo
Despite the generally positive outlook for global retirement security, individuals are feeling pressure as more come to the realization that they are on their own when it comes to funding income later in life.
Results from the Natixis Global Survey of Individual Investors show that the number of individuals who believe it is increasingly their responsibility to fund retirement on their own, rather than rely on public and private pensions, grew from 63% to 77% between 2015 and 2023.
Twenty-seven percent of investors said that even if they saved $1 million, they still could not afford to retire, including 24% of those who have already accumulated $1 million.
Those who believe it will take a miracle to achieve retirement security dipped slightly from 41% in 2021 to 39% in 2023.
“As individuals increasingly take charge of their retirement planning amidst these challenges, financial service providers must become more proactive in supporting them,” Liana Magner, head of retirement and institutional in the United States for Natixis IM, said in a statement.
“To prevent future crises, it’s crucial to offer personalized solutions that address both the current economic landscape and individuals’ specific retirement needs, including access to both public and private markets.”
CoreData Research conducted the survey in February and March 2023 among 8,550 individual investors in 23 countries and regions including North America, Asia, Europe and Latin America.
U.S. Drops in Rankings
The United States fell two spots to 22nd place in the 2024 index. Despite its lower overall retirement security score, the U.S. leads all other countries in GDP growth at 2.5%, driven by an influx of immigration, Natixis IM said.
Furthermore, as inflation has decreased to historical levels, the Federal Reserve has signaled the potential for interest rate cuts for the second half of the year, which could provide relief for borrowers.
Here’s how the United States performed in the four sub-indexes:
15th in finances in retirement: Up from 13th place because of improvements in tax pressure, interest rates, bank nonperforming loans and old age dependency, driven in part by the Fed’s decision to maintain interest rates to combat inflation.
23rd in quality of life: Down two spots as happiness among the country’s population declined, driven by a decrease in social connections, especially for those younger than 30.
24th in material well-being: Down from 21st place as the country experienced a rise in unemployment due to fewer job openings and increasing layoffs, despite the Fed’s success in balancing inflation and maintaining GDP growth.
27th in health: Down two spots for the category overall. Although the country trailed most of its peers in life expectancy, it maintained a perfect score in health expenditure per capita and is within the top four countries in insured health expenditure.
See the accompanying gallery for the world’s 15 best countries for retirement security, according to Natixis.
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