Study: Retirement security not just the responsibility of individuals
****The document is expired****"
Retirement was once a simple proposition: Individuals worked a lifetime and saved, employers provided a pension, and payroll taxes funded government benefits. But demographics and economics have rendered old models unsustainable.
In response to surging populations, expanding lifespans, and shrinking government budgets, policy makers and employers continue to shift the responsibility of retirement funding to the individual, according to the 2016 Natixis Global Retirement Index released by Natixis Global Asset Management.
The index examines key factors that drive retirement security, and provides a comparison tool for best practices in retirement policy across 43 countries. This study offers:
An examination of top-performing countries for retirement security in 2016.
An analysis of best practices for sound retirement policy.
An assessment of what can be done by policy makers, employers, individuals and asset managers to shore up retirement security globally.
Among the leading countries for retirement security identified by the Index, Northern Europe dominates the top 10, including Norway at number one, as well as Switzerland, Iceland, Sweden, Germany, the Netherlands and Austria. They are joined by New Zealand (no. 4), Australia (no. 6) and Canada (no. 10), with the United States coming in at 14.
“Demographics and economics have rendered the old retirement model unsustainable, but the leaders in our index are finding innovative ways to adapt to the new reality and provide a blueprint for the rest of the world,” said John Hailer, CEO of Natixis Global Asset Management in the Americas and Asia.
The countries at the top of our Index provide solid best practices for ensuring retirement security. We see four key trends that will help shape the future of retirement security globally:
Access – As more of the responsibility for funding retirement falls to individuals, it’s critical that policy makers and employers work to ensure they are set up to succeed.
Incentives – Across the globe, policy makers know that favorable tax treatment can be a powerful tool to drive positive behavior in retirement saving. Employers also play a key role in increasing participation with matching contributions, employee education, and access to professional advice.
Engagement – For individuals, the key is to move beyond just participation and engage fully in their retirement plan. It’s critical to understand your goals, understand the choices you have and most importantly understand just how much risk you can take on. It’s then that you can move from merely saving for retirement to investing for your future.
Economics – Retirement security extends well beyond the savings vehicles themselves and includes consideration for a growing population that will be living on a fixed income for many years to come. Monetary, fiscal, and healthcare policies all play a critical role in ensuring that retirees are self-sufficient.