Data and Research July 19, 2017

The U.S. Falls Three Places to No. 17 in the Natixis Global Retirement Index

Retirees' perceived quality of life decreases.
Reported by

Among the 43 countries in the Natixis Global Retirement Index, the U.S. fell three places to No. 17 and achieved an overall score of 72%. 

U.S. retirees’ perceived quality of life decreased in 2016. While the U.S. maintained its No. 7 ranking in health, its highest ranking in the sub-indices, the U.S. ranked 30th in life expectancy, suggesting that what Americans spend on health care may not be yielding the same return on investment as in other countries.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

The U.S. had the fifth-highest income per captia in the index, but its income inequality rose. “The results suggest that millions of lower-income Americans are missing out on economic growth and may struggle to save for a secure retirement as a result,” Natixis says.

The U.S. ranked in the top 10 for finances, “largely due to improvements in bank non-performing loans and federal debt levels relative to other nations,” Natixis says. However, the nation’s ratio of retirees to employment-age adults rose, putting increasing pressure on Social Security and Medicare.

“This year’s Global Retirement Index is an important reminder that retirement security is a complex, multi-dimensional issue that is vastly influenced by a nation’s policies, politics and economics,” says Ed Farrington, executive vice president of retirement for Natixis Global Asset Management. “The population is getting older, making retirement security one of the most pressing social issues facing the world. Factors such as increasing longevity, income inequality and the impact of monetary policy on personal savings and pension liabilities are challenging the longstanding assumptions about how Americans plan for and live in retirement.”

Participants July 18, 2017

Saving for Retirement Not a Current Priority for Many Millennials

Many Millennials would rather pay down current debt than prioritize retirement savings, according to a survey by BMO Wealth Management.

Reported by

The significant student loan debt carried by many Millennials today is preventing adequate retirement savings among the generation, according to a recent study by BMO Wealth Management. 

The survey found that only 10% of Millennials consider retirement planning a current priority. Meanwhile, 37% said retirement is too far away to address as a main goal, particularly in light of current financial responsibilities. Twenty-two percent of respondents said they would rather pay off their accumulated debts first before starting to save for retirement.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Meanwhile, 25% said they are concerned whether or not they will ever be able to afford to retire. As for saving for major purchases, such as a first home, young people are taking diverse approaches, the research found. Most (42%) save for these potential expenses via a savings account. Thirteen percent prefer individual retirement accounts (IRAs) and 401(k) accounts. A smaller percentage (6%) invest in Roth IRAs, suggesting many Millennials may be unaware of the diverse benefits associated with saving through these vehicles.

“IRAs, Roth IRAs and 401(k)s are some of the best plans for helping millennials save for major purchases, such as buying a home or saving for retirement,” said Stephen Williams, senior vice president of wealth planning, BMO Wealth Management. “Contributions to these accounts grow tax-free or tax-deferred and savings can significantly accumulate over time. I cannot stress enough to Millennials the value of utilizing these accounts for retirement planning and also for other means.”

Moreover, the survey found that both Millennial men (37%) and women (29%) are concerned about their lack of financial literacy.

When asked to name their highest financial priority, respondents cited paying down accumulated debt (25%), finding meaningful/better paying work (17%), and purchasing or upgrading to a new home (15%).

“As Millennials’ incomes grow, financial planning and literacy will become even more important in order for them to achieve their financial goals,” Williams concluded. “It is imperative for Millennials to engage advisers as they start to map out their financial plans, in order to maximize their financial potential in a way that suits their current lifestyle and helps accomplish their aspirations.”

«