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How The U.S

How the U.S. Lags Behind Other Countries in Retirement

I think it’s fascinating to see how prepared Americans and America are for retirement and aging compared with the rest of the world. Two surveys out today, in conjunction with the OECD Bridging Divides meeting in Paris, come up with dramatically different answers. (The OECD is the 35-country group whose full name is the Organisation for Economic Co-Operation and Development.)

In Successful Retirement: Healthy Aging and Financial Security, U.S. workers generally beat out others in 14 countries for retirement preparation. “We can do a lot better to improve our retirement outlook, but when compared to our peers around the world, we are actually doing quite well,” said Catherine Collinson, president of Transamerica Center for Retirement Studies (TCRS) and executive director of Aegon Center for Longevity and Retirement. Those two groups released the report along with Instituto de Longevidade Mongeral Aegon.

The notion of personal responsibility for retirement seems to have become ingrained in our national psyche. An impressive 91% of Americans whom Transamerica surveyed felt “very or somewhat” personally responsible for making sure they have sufficient income in retirement vs. just 73% of workers globally. The Transamerica report interviewed 14,400 workers and 1,600 retirees in Australia, Brazil, Canada, China, France, Germany, Hungary, India, Japan, the Netherlands, Poland, Spain, Turkey, the United Kingdom and the U.S.

India, however, outshone the U.S. in a few key areas of this survey and offers us a few lessons, as I’ll explain shortly.

But the U.S. didn’t fare as well in the AARP Aging Readiness and Competitiveness Report (or ARC).

“the U.S. stands out for the high cost of health care and its failure to generate better health outcomes,”

AARP and FP Analytics looked at how prepared 12 nations are for the growth of their 60+ populations in four sectors: 1) Community & Social Infrastructure; 2) Productive Opportunity & Economic Output; 3) Healthcare & Wellness and 4) Technological Engagement. Each country was deemed a “leader,” a “mover” (one making notable progress) or a “laggard” for each sector and the U.S. was a leader only for Technological Engagement. It was a laggard in Healthcare & Wellness.

AARP studied (but did not rank) Brazil, Canada, China, Germany, Israel, Japan, Korea, Mexico, South Africa, Turkey, the United Kingdom and the U.S. (You can read reports for each country and use AARP’s online tool to compare country-by-country growth in their 60+ population over the next 35 years here.) The number of people 60+ in those countries will more than double by 2050, its report said. “The challenges and opportunities presented by the massive growth of the 60-plus population is a global phenomenon — it’s truly borderless,” said AARP CEO JoAnn Jenkins, in a statement.

Let me take the two reports one at a time.

The Transamerica report

You may be surprised to learn that according to Transamerica’s sixth annual survey, U.S. workers are far more on top of retirement planning than workers in many other countries. But that’s not saying a whole lot; the retirement preparation percentages are pretty dismal mostly everywhere. A few key stats:

  • 57% of U.S. workers are “habitual savers” vs. 39% globally. Credit 401(k)s, says Collinson.
  • 47% of Americans have a backup plan for retirement income if they’re unable to continue working before reaching their planned retirement age vs. 33% of workers overall. Americans’ backup plans: their spouse or partner will continue working or they’ll dip more into savings. There’s a strong chance they’ll need a backup plan; 61% of U.S. retirees surveyed said they retired sooner than they planned, usually due to poor health, a job loss or family caregiving responsibilities.
  • 43% of Americans feel “very or extremely” confident they will be able to retire with the…

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