Waiting for a miracle: Some pessimistic about ever retiring as U.S. drops in global retiree well-being rankings
When ranking financial wellbeing in retirement, although the U.S. dropped in standing, the U.K., Israel, Japan, and others ranked below.
Many Americans feel that their retirement dreams are slipping away because of the consequences of the pandemic, such as increased government debt, rising inflation and persistently low interest rates.
As a result, the United States slipped one spot to No. 17 among developed nations for financial security and wellbeing of retirees in the 2021 Global Retirement Index from Natixis Investment Managers. Iceland topped the list for the third consecutive year, followed by Switzerland, Norway, Ireland, the Netherlands, New Zealand, Australia, Germany, Denmark and Canada.
Researchers learned the following about Americans:
Overall, 41 percent of respondents, including 46 percent of Generation Y, 45 percent of Generation X and 30 percent of baby boomers, believe they will need a miracle to be able to retire securely.
Although 73 percent recognize it increasingly is their responsibility to fund retirement instead of relying on a pension or Social Security, 42 percent say it will be difficult to make ends meet if Social Security benefits are lower than expected, including 31 percent of those with a net worth of $1 million or more.
Nearly six in 10 accept that they will have to keep working for longer, while 36 percent believe they will never have enough money to retire, including 51 percent of Generation Y, 48 percent of Generation X and one in five baby boomers.
Two-thirds see long-term inflation as one of the biggest risks to their retirement security, while 64 percent worry that health-care costs will eat up their savings.
Half are concerned that low interest rates will make it harder to generate income in retirement.
“The pandemic has exacerbated financial inequality and accelerated long-term trends that are eroding the prospect of retirement security for many,” said Jim Roach, senior vice president of retirement strategies at Natixis Investment Managers. “As policymakers look to normalize fiscal and economic policy in the wake of the pandemic, Natixis Investment Managers’ Global Retirement Index provides insight into the factors having the greatest impact on retirement security around the world.”
The survey also found opportunities for financial advisors and employers to take on a greater role in retirement security:
- Eight in 10 U.S. investors believe employers have a responsibility to help their employees achieve a financially secure retirement.
- Nearly eight in 10 would prefer to work for a company that offers a retirement plan savings match.
- Six in 10 investors say they need professional help with selecting investments in their workplace retirement plan, which 36 percent of baby boomers and at least one in five younger investors say they do not understand.
- Younger investors, including 73 percent of Generation Y and 65 percent of Generation X, are most likely to say they need professional financial advice, compared to 57 percent of baby boomers.
- Two-thirds of investors say they would be motivated to invest more for retirement if they had access to investments that are more closely aligned with their priorities and values.
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