Switzerland ranked second in Global Index Retirement

8 years ago - Published in Finance, Fundamental Analysis

The fifth annual Global Retirement Index ranking from Natixis Global Asset Management has Norway, Switzerland, and Iceland holding on to the top three slots from 2016. The ranking creates an overall retirement security score for each country from 18 performance indicators that address finances, healthcare, material well-being, and quality of life. Countries are also ranked by those four sub-indexes. Switzerland has consistently topped the rankings since the index was launched five years ago.

With more retirees around the world responsible for their own financial security, the countries that ranked the best benefited from a combination of strong social programs, widely accessible health care and low levels of income inequality, according to Natixis. 

Of the 25 countries with the highest overall scores, the U.S. and Austria saw the biggest annual declines this year. The U.S. score came in 17th with 72 out of 100, which puts it right below Belgium and the Czech Republic and just above the United Kingdom and France.  United States slid three places in this year’s rankings, partly due to lagging life expectancy and a growing gap in economic opportunity.
According to Natixis, the Top five countries and some factors that influenced their high scores:

1. Norway (Score: 86%): Norway’s economy combines free market capitalism with a modern welfare state. The quality of life in Norway also notched up, with the highest score going to the happiness of its retirees, and improved scores for CO2 emissions and air quality levels.

2. Switzerland (Score: 84%): High employment, capital income, health expenditures per capita, and life expectancy were key in securing the No. 2

3. Iceland (Score: 82%): Though it suffered a financial crisis in 2008, Iceland still has a high tax burden. Still, that’s not all bad because that higher tax burden can be contributed to increases in public spending on infrastructure, health, and education. Economic growth, too, is at a high.

4. Sweden (Score: 80%): The country’s great mix of wealth, income equality, low unemployment and top-notch health care, makes it a world leader in retirement security.

5. New Zealand (Score: 80%): The country has great economic conditions for retirees—low inflation, interest rates are rising and public debt is relatively low.

The top 10 countries for retirement security were Norway, Switzerland, Iceland, Sweden, New Zealand, Australia, Germany, Denmark, the Netherlands, and Luxembourg. 

According to the United Nations (UN) a country is ageing when seven per cent of the population is 65 years or older. When it reaches 14 per cent, the country is aged and becomes hyper-aged if more than 21 per cent of the population is older than 65. Germany, Italy and Japan fall into the hyper-aged category.

According to the European Parliamentary Research Service, one in four citizens in the European Union currently depends on pension income and between 2010 and 2060 the proportion of over 65s and the working age population will almost double, from one older person for every four workers to one for every two.