Canada is no longer in the top 10
by Julie Cazzin
This week, Natixis Global Asset Management released its fifth annual Global Retirement Index (GRI), which looks at key factors that drive retirement security across 43 countries. The GRI’s aim is to provide a measure of how well retirees are set up to succeed across various countries in the developed world.
So how did Canada do? According to the summary, Canada ranked 11th in the world for retirement security, slipping one spot from last year’s results. The reason for the decline? In part, it was because prosperity has lagged behind for lower-income Canadians.
The Index creates an overall security score based on four factors that affect the lives of Canadians. According to the report, Canada’s score this year was 76% and several factors affected the outcome:
- A decline in prosperity. Canada ranks 21 for income inequality—indicating that many Canadians are missing out on economic growth and may be struggling to save for retirement.
- Robust finances. Although Canada finishes among the top 10 countries for financial stability, it’s old-age dependency ratio, which measures the proportion of people age 65 and older to those of working age, has increased, which stresses the government programs that support retirees.
- Strong grades in health: Canada’s score for the life expectancy indicator improved from last year but the country finishes 10th for both health expenditures per capita and insured health expenditures, which measures the proportion of health care expenses covered by insurance.
Here are the Top five countries and some factors that influenced their high scores:
- 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.
- Switzerland (Score: 84%): High employment, capital income, health expenditures per capita, and life expectancy were key in securing the No. 2 spot.
- 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.
- 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.
- 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 next five countries (and their scores) include:
- Australia (78%)
- Germany (77%)
- Denmark (77%)
- Netherlands (77%)
- Luxembourg (76%)
And the United States? It came in 17th place with a score of 72%. It slid three places in this year’s rankings, partly due to lagging life expectancy and a growing gap in economic opportunity.
*Download a copy of the Global Retirement Index report, here.