United States Ranks 17th for Retiree Wellbeing in Natixis Investment Managers' 2021 Global Retirement Index as Savers Hope for a Miracle
The United States slipped one spot to No. 17 among developed nations in the 2021 Global Retirement Index (GRI), released today by Natixis Investment Managers (Natixis IM). The ninth annual index, a snapshot of the relative financial security of retirees in 44 countries, shows that many Americans feel that their retirement dreams are slipping away, notably as a result of the macro-economic consequences of the COVID-19 pandemic including increased government debt, rising inflation and persistently low interest rates. Savers are shouldering a growing share of the responsibility for funding their retirement and are increasingly looking to the private sector and financial advisors for help.
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Top 25 Countries in the 2021 Natixis Investment Managers Global Retirement Index
In a survey of 750 US individual investors, Natixis Investment Managers found:
"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 GRI examines 18 performance indicators of retiree welfare grouped into four thematic sub-indices, namely:
The GRI calculates the performance for each country on these criteria, resulting in a composite score that provides a comparative tool for evaluating retirement security globally, as well as identifying drivers of changes in each country's score and ranking.
2021 Global Retirement Index: A global view of retiree wellbeing
The US ranked 17th overall in the 2021 Global Retirement Index, placing No. 11 for Finances in Retirement; No.17 in Health; No. 21 in Quality of Life and No. 26 in Material Wellbeing.
The US had lower scores in three of four sub-indices, including:
In Material Wellbeing, the only sub-index in which the US does not rank among the top 25 nations, it scored slightly higher for income per capita and income equality. Among all the GRI countries in the Index, the US has the highest health expenditure per capita, the sixth highest income per capita and the sixth lowest score for government indebtedness. Meanwhile, 56% of US investors surveyed by Natixis IM, including 64% of Generation Y and 62% of Generation X, believe that income inequality has a detrimental impact on overall retirement security in the US.
Public policy and the private sector opportunity in a world looking beyond COVID
"The challenge is compounded as retirees invest in riskier assets to generate the returns they need at a point in life when they may not have the time to recoup potential losses," said Dave Goodsell, Executive Director, Natixis IM Center for Investor Insight. "Fortunately for today's policy makers, low interest rates make debt more manageable. However, growing levels of public debt and the need to find budgetary solutions will force tough decisions about government spending, including public retirement benefits, raising taxes, raising the retirement age, and cutting benefits."
Natixis IM's survey found that in the US, 83% of investors remain confident they can securely retire and are working toward that goal. On average, they are saving 18% of their current income for retirement. Should government benefits, workplace savings, and personal savings come up short, many Americans believe the answer is simply to work longer. Yet 39% worry they won't be able to stay employed even if they wanted to.
One-third (34%) of investors think that retirement might never be an option, including 40% of millennials and one in four (25%) Baby Boomers. The conundrum is so great that nearly half (49%) avoid thinking about their retirement security altogether. More worrisome is that these findings represent a population of investors with a median net worth of $450,000, who have accumulated a median of $350,000 in savings for retirement, far more than the median of $65,000 saved for retirement by the general US population. 1
The survey also highlights the opportunity that exists for the private sector, namely employers and financial advisors, to play a role:
A report on the 2021 Global Retirement Index explores in-depth these findings and other factors affecting retirement security globally. Please find the full report here.
About the Natixis Investment Institute
About Natixis Investment Managers
Headquartered in Paris and Boston, Natixis Investment Managers is wholly-owned by Natixis. Natixis is a subsidiary of BPCE, the second-largest banking group in France. Natixis Investment Managers' affiliated investment management firms include AEW; Alliance Entreprendre; AlphaSimplex Group; DNCA Investments;3 Dorval Asset Management; Flexstone Partners; Gateway (News - Alert) Investment Advisers; Harris Associates; Investors Mutual Limited; Loomis, Sayles & Company; Mirova; MV Credit; Naxicap Partners; Ossiam; Ostrum Asset Management; Seeyond; Seventure Partners; Thematics Asset Management; Vauban Infrastructure Partners; Vaughan Nelson Investment Management; and WCM Investment Management. Additionally, investment solutions are offered through Natixis Investment Managers Solutions and Natixis Advisors, LLC. Not all offerings available in all jurisdictions. For additional information, please visit Natixis Investment Managers' website at im.natixis.com | LinkedIn (News - Alert): linkedin.com/company/natixis-investment-managers.
Natixis Investment Managers' distribution and service groups include Natixis Distribution, LLC, a limited purpose broker-dealer and the distributor of various U.S. registered investment companies for which advisory services are provided by affiliated firms of Natixis Investment Managers, Natixis Investment Managers S.A. (Luxembourg), Natixis Investment Managers International (France), and their affiliated distribution and service entities in Europe and Asia.
1 Cerulli Quantitative Update: Global Markets 2021 ranked Natixis Investment Managers as the 15th largest asset manager in the world based on assets under management as of December 31, 2020.
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