Countries with the Most Secure Retirement in 2014

People are increasingly more responsible for their own retirement security, according to a new survey, which ranked the long-term financial security of retirees in 30 countries.

The 2014 Global Retirement Index from Natixis Global Asset Management (NGAM) found that many countries’ retirement systems are being pressured by aging populations, increasingly high old-age dependency ratios, the historically prolonged period of low interest rates and high levels of sovereign debt.

NGAM’s analysis focused on 20 trends across four categories: health and healthcare quality, personal income and finances, quality of life, and socio-economic factors.

“The responsibility for financial security in retirement is falling even more heavily on individuals than ever before and this trend is likely to continue as government resources become more scarce,” John T. Hailer, CEO for NGAM — The Americas and Asia, said in a statement. “It is becoming increasingly apparent that to ensure financial security in retirement, individuals need to set personal goals and view planning and saving for retirement as a serious, conscious and strategic pursuit."

According to NGAM, the top countries were able to create a stable retirement for citizens by emphasizing simplicity in their retirement scheme’s overall design and structure.

“Individuals need to take a more proactive, personal role in planning and saving; employers need to be more flexible and open to programs that can broaden coverage; and policymakers need to work together to institute meaningful reforms that can help drive improvement,” according NAGM’s report.

The United States did not make the top 10 again this year. Instead the US stayed at 19, though this year the United Kingdom is now ranked ahead of the US. The rankings in general changed up a fair amount with two countries sneaking into the top 10 and knocking France and the Netherlands back to 15 and 13, respectively.

Europe, in general, did very well, taking 8 of the top 10 spots.

10. Luxembourg

Health index: 85%

Finances in retirement index: 59%

Quality of life index: 80%

Material well-being index: 89%

Global retirement index: 78%

The river Alzette in Luxembourg Pfaffenthal

While still in the top 10, Luxembourg is down significantly from last year’s ranking, when the country was in third place.

In particular, finances took a large hit, while material well-being is still one of the highest in the top 30 nations. Last year, Luxembourg’s score for the finances in retirement index was 80%.

9. New Zealand

Health index: 79%

Finances in retirement index: 72%

Quality of life index: 87%

Material well-being index: 75%

Global retirement index: 78%

Auckland

New Zealand one of the most improved countries from last year, when the country was ranked 22. Other countries with large improvements were the Republic of Korea (ranked 17 this year compared to 27) and Iceland (11 this year compared to 23).

8. Finland

Health index: 82%

Finances in retirement index: 68%

Quality of life index: 83%

Material well-being index: 81%

Global retirement index: 78%

Helsinki

Compared to last year, Finland’s finances have dropped from 78%, while quality improved from 78%. Still, the country maintains a great healthcare system and a sound financial system, according to NAGM. Finland is also one of the best performers worldwide in terms of income equality.

7. Germany

Health index: 88%

Finances in retirement index: 63%

Quality of life index: 85%

Material well-being index: 82%

Global retirement index: 79%

Hamburg. Photo by Thomas Wolf.

Germany is up 2 spots from the previous year. While material well-being dropped slightly, quality of life is up from 80% and finances and health are flat year over year. Germany is the largest economy in Europe and the country has a top welfare and healthcare system, according to NAGM.

6. Denmark

Health index: 83%

Finances in retirement index: 64%

Quality of life index: 87%

Material well-being index: 83%

Global retirement index: 79%

Copenhagen

Last year, Denmark ranked 8, so there’s been some improvement, particularly in quality of life, which is up from 83%. The country is famous for being one of the happiest in the world. However, finances have stayed flat and material well-being, like in Germany, is down.

5. Australia

Health index: 84%

Finances in retirement index: 74%

Quality of life index: 82%

Material well-being index: 78%

Global retirement index: 79%

Melbourne. Photo by David Iliff. License: CC-BY-SA 3.0

Entering the top 10 this year, Australia’s finances in retirement received the best rating out of the top 30 nations. This index captures the soundness of a country’s financial system, the level of savings and investment, and the preservation of the purchasing power of savings.

Australians need strong finances, though, since both Sydney and Melbourne are among the most expensive cities in the world.

4. Sweden

Health index: 83%

Finances in retirement index: 68%

Quality of life index: 87%

Material well-being index: 82%

Global retirement index: 79%

Stockholm. Photo by Arild Vågen

One of the few non-movers year over year, Sweden actually decrease fairly significantly in finances from last year’s score of 74%. However, the good news is that they won’t really need the money on their healthcare anyway. A Health Affairs report from November revealed that fewer than 10% of Sweden’s residents had high out-of-pocket costs.

3. Austria

Health index: 90%

Finances in retirement index: 66%

Quality of life index: 86%

Material well-being index: 97%

Global retirement index: 84%

Durnstein. © Bwag/Commons.

Austria’s material well-being ranked far higher than the rest of the nations in the top 30, and significantly higher than what it was last year. The index was calculated using income per capita, income equality and unemployment, according toe NAGM. Quality of life is also up slightly, while the other two indexes are mostly flat.

2. Norway

Health index: 86%

Finances in retirement index: 66%

Quality of life index: 89%

Material well-being index: 87%

Global retirement index: 84%

Trondheim

Even the countries that rated high for overall retirement security still scored relatively low in the finances in retirement index. Despite the high health index rating, a Health Affairs report from November 2013 found that at least a quarter of residents reported waiting 6 or more days to see a doctor or nurse, which is no better than the access to care troubles in the U.S.

Last year, though, Norway had taken the top spot, which now goes too…

1. Switzerland

Health index: 86%

Finances in retirement index: 71%

Quality of life index: 95%

Material well-being index: 87%

Global retirement index: 84%

River Ruess in the old part of Lucerne. Photo by Simon Koopmann.

Switzerland’s retirees are, by far, the happiest and most fulfilled out of the top 30 nations. Even though the country received the same global retirement index rating as Norway, Switzerland performed much better in the finances in retirement index and the material well-being index.

The high quality of life doesn’t come without a price: both Zurich and Geneva are two of the most expensive cities in the world.

Oddly enough, Switzerland took the top spot this year despite the fact that finances dropped significantly from last years 83% and health is down from 86%.