Jonathan Williams retired from his job at the US Department of Defense at 65 and moved to Spain. He and his wife had already bought a house in a Spanish beach town and plan to spend the rest of their lives there. "The groceries cost a lot less here, so do several other bills, and we can lead a comfortable life here, while enjoying a cosmopolitan lifestyle," Williams said. His move reflects a trend that is gathering pace.
This trend is reflected in recent global retirement rankings. The US fell to 24th in the Natixis Global Retirement Index, down from 21st last year, and ranks 30th out of 52 countries in the Mercer CFA Institute Global Pension Index, well behind a group of European nations. Rising living costs, thin income security and expensive healthcare are making America a less comfortable place to grow old.
Natixis, working with CoreData Research, looks at finances, material well-being, health and quality of life across 44 countries. Mercer asks whether a pension system is adequate, sustainable and trustworthy. Norway tops the Natixis list for a second straight year with 83 per cent, followed by Ireland at 81 per cent, the Netherlands at 79 per cent, Switzerland and Denmark, so European countries fill the top five. Mercer's index is led by the Netherlands, Iceland and Denmark, helped by workplace pension schemes that cover almost everyone, backed by strong oversight.
'Kind of wobbly'
Dave Goodsell, Executive Director of the Natixis Center for Investor Insight, said the traditional three-legged stool of government benefits, employer plans and personal savings is "kind of wobbly right now." He said an ageing population, rising public debt and inflation are adding strain, and that the world needs a new way to explain where retirement income will come from.
A system with gaps
Mercer gave the US a score of 61.1, a C+, up from 60.4 in 2024, though its rank slipped from 29th to 30th. By Mercer's own definition, a C+ means a system with "some good features" but also "major risks and/or shortcomings." The gaps are widest for lower-income and non-traditional workers. Natixis's 2026 index shows the US losing ground in three of four categories. It fell eight places to 18th on retirement finances and ranks 25th on health, even though it spends more per person on healthcare than any other country in the index. Its overall score eased from 70 to 68 per cent.
Troubled retirements
For many retirees, those scores show up in the household budget. The average retired American receives about $2,071 a month from Social Security, less than $25,000 a year. This year's raise was only about $56 a month, and rising Medicare premiums took nearly a third of it, as the Medicare Part B premium climbed 9.7 per cent to $202.90.
A pension from a former employer can ease the strain, but fewer retirees have one than many assume. Census data show that in 2024 only about one in three older Americans received income from a private, government, military or railroad pension. The median private pension for people aged 65 and older was $11,440 a year, under $1,000 a month, against $24,930 for state and local government retirees.
The gap reflects who still has access: just 14 per cent of private-sector workers had a traditional pension available in March 2025, compared with 86 per cent of state and local government employees. Only 29 per cent of current workers have one, as employers have shifted to 401(k)-style plans that leave the investment risk with the worker.
Medical costs weigh heavily too. Fidelity estimates that a 65-year-old retiring this year will spend $185,500 on healthcare over retirement, or $371,000 for a couple, before long-term care. Many do not see it coming, since 54 per cent of pre-retirees wrongly believe Medicare covers all their health costs. Natixis finds that 35 per cent of US investors fear running out of money paying for healthcare and long-term care, against 24 per cent globally.
A widening gap with Europe
On Mercer's 100-point scale, the Netherlands tops the 2025 index with 85.4, while the US scores 61.1, a gap of more than 24 points. The US also sits below the global average of 64.5. It scores 64.1 on adequacy, meaning how much retirees actually receive, against 86.1 for the Netherlands. On sustainability, whether the system can keep paying as the population ages, the US scores 59.9, against 85.7 for Iceland. The leaders share pension coverage that reaches almost everyone, steady saving through a working life, and strict oversight of the money.
The rest of the world is moving faster. Eight systems upgraded their grades in Mercer's 2025 edition and none were downgraded, and pension assets across OECD countries grew about 7 per cent in 2024, to a record $69.8 trillion. As people live longer and fewer babies are born, systems that already cover everyone are better placed to cope. The US, with its patchwork of Social Security, employer plans and personal savings, risks being left further behind.
Growing uncertainty
Americans are increasingly on their own. In a Natixis survey of retirees, 81 per cent of US respondents feel more responsible for fully funding their own retirement, up from 63 per cent a decade earlier. Three-quarters say mounting public debt will ultimately mean lower retirement benefits, and 41 per cent say inflation is killing their retirement dreams. Globally, 66 per cent of investors say they are saving less because of higher everyday costs, and 69 per cent say inflation has eroded the future value of their retirement savings.
The overall outlook is uncertain too. The Social Security trust fund that pays retirement and survivor benefits is projected to run dry in late 2032, according to the 2026 Trustees Report, after which incoming payroll taxes could cover only 78 per cent of promised benefits, a cut of about 22 per cent unless Congress acts. For the average retiree, that would mean roughly $450 less a month. Combined with the disability fund, reserves would last until 2034, with 83 per cent of benefits payable, but that would need legislation, and Congress has yet to agree on how to secure Social Security's future.
