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The retirement system in the United States has received a C+ grade and ranked 29th out of 48 global pension systems in 2024, according to the annual Mercer CFA Institute Global Pension Index. In comparison, a similar index compiled by Natixis Investment Management placed the U.S. at 22nd out of 44 nations. The U.S. system, often referred to as a three-legged stool consisting of Social Security, workplace retirement plans, and individual savings, faces challenges such as limited access to workplace retirement plans and leakage of savings before retirement. This has resulted in a lower ranking compared to other countries with more comprehensive retirement systems.

The Netherlands topped the list, followed by Iceland, Denmark, and Israel. These countries have achieved high grades due to their comprehensive coverage of workers and strict regulations on premature withdrawals of retirement savings. In contrast, the U.S. allows for more flexibility in accessing funds, but this also leads to a higher rate of depletion of retirement savings. Policymakers are working to address these issues, with some states implementing auto-IRA programs to increase retirement plan coverage and federal laws expanding access to retirement savings for part-time workers. Additionally, experts suggest increasing the minimum benefit for all retirees to strengthen the retirement resiliency of Americans.

Social Security remains a significant income source for older Americans, with about nine out of 10 people aged 65 and older receiving benefits. While Social Security benefits are tied to a worker’s wage and work history, the minimum benefit in the U.S. is lower compared to other countries with public retirement programs. Enhancing the public pension benefit could improve retirement security for all Americans.

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