6/29/2012 9:46 PM ET|
US retirement trails other nations'
When compared with similarly wealthy nations, the United States comes up short on its benefits for retirees in a few key areas.
Comparing the fortunes of U.S. retirees with their counterparts in other wealthy nations can be challenging, given differences in public and private benefit programs, the age at which citizens leave the workforce, and various pension reforms of recent years.
Generally, though, many economists view public retirement benefits in the United States as less generous than those in other wealthy nations.
The gaps may be narrowing, though, as other countries -- many of which have long had younger retirement ages -- seek to adjust their systems.
"There's a much richer support network in Europe than there is here," says Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology.
U.S. Social Security Insurance benefits typically replace less than half the income Americans earned on the job, while in Europe, similar benefits often account for at least two-thirds of pre-retirement income, says Gruber.
"We always are neck and neck with the United Kingdom, but other than the U.K., I think we are among the stingiest," adds Alicia Munnell, the director of the Center for Retirement Research at Boston College.
U.S. support for retirees remains below the average for its fellow Organisation for Economic Co-operation and Development member countries at every income level, says Munnell.
US ranking in OECD study
In addition, U.S. public pension spending amounted to 6% of gross domestic product in 2008, less than the 7% average for all OECD countries.
National comparisons depend in part, however, on whether public or private pensions are considered, and on which aspects of retirement benefits are measured.
Among the 34 member OECD countries, the net replacement rate -- retirement income as a percentage of pre-retirement income -- for an average earner is 50% from public pensions alone and nearly 68% when mandatory private pensions are included, according to a 2011 OECD report.
The United States slightly trails the 50% average for public pensions only, at 47.3%, the report showed.
Austria's rate was nearly 90%, Italy's 72%, Hungary's 62%, Portugal's 70%, Germany's 56%, Spain's 85%, France's more than 60%, the United Kingdom's more than 37%, Denmark's 33%, Luxembourg's 94% and the Netherlands' 33.1%. Japan's public pension replacement rate is 40%, Korea's 47.5%.
The United States has no mandatory private pensions. In some of the countries that do, such plans significantly boost the income replacement rate.
Australia's replacement rate, for instance, is 59%, counting public and mandatory private pensions. Denmark's is 90%, Hungary's is 106% and the Netherlands' almost 100%.
Replacement rates assess benefit levels at retirement. The OECD report also measures gross pension wealth -- the value of lifetime flow of retirement income -- and found that average-earning men in member countries received 9.6 times annual earnings, while women, because of longer life-expectancy rates, received 11.1 times annual earnings.
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VIDEO ON MSN MONEY
-Complain about those with a retirement plan because after 30 years of drifting through the work force you wake up at 50 too old to start a plan or begin saving leaving you on a social program that could crumble any day.
-Write your Congressman/Woman and ask why CEO'S make billions in bonus cash while their employees who made them that $$$ work as a Walmart return specialist at age 75. It may be too late for you but Its for the "children"...YOUR children.
Funny how 90% choose "A" and go after those who have retirement instead of the Barons who robbed them of theirs...
What the heck is wrong with these innumerate oafs performing this study.......was solvency any part of the study criteria?
Can't really expect much better from msn, they have a socialist agenda to keep pushing.
I know many make so little they can not save, but let me ask you before you attack me for this statement, how many of you eat out more than once a week, I am talking about any meal, how many of you find it a necessity to go to an amusement park at least annual if not more, how many of you go to the movies more than twice a month, how many of you are impulse buyers who go to sales even when you really don't need anything? How many of you refinanced your homes during the early late 1990's and early 2000's multiple times to pay for an expensive trip, buy an RV, a Boat and couple new cars or just to pay off your credit cards, because you just knew the housing market just could not go bust?
Also, the Federal Government and the Federal Reserve are responsible for the decimation of our retirement savings, the interest rate is being held at a historic low for a historic length of time. Thus those who have saved for years find that their retirement savings is dwindling because the interest rate is greatly below the inflation rate.
The only ones who come out ahead are the people with public pensions, they have a high pension and then if the funds in the pension are not enough to pay their inflated pensions they just force the local governments to cough up more money so they won't lose a dime. While the rest of us do not have that protection.
So there's a spending issue - yeah right. The main spending issue is on the free-ride of welfare we give to business and the wealthy in this country. Subsidies, price supports, tax breaks and credits to American businesses and individuals that can't stand on their own and don't need any more breaks at our expense.
Entitlements to the rich and sleazy corporate and wealthy beggars has to stop before it crushes our economy. Over $80 billion in subsidies to oil alone at the expense of taxpayers. That's $80 billion of free ride money that adds to our deficit every year while all the gasoline produced gets shipped out onto the world market so big oil can continue with record profits at our expense.
And still we are told that it is the entitlements to the elderly, the sick and disabled, and the poor that are the problem. Nothing but GOP BS!
In France, we've heard about them raising the retirement age from 60, but in order to retire at 60 -or now 62, your have to have have worked for 40 years - and every quarter of those years.
And note that when they say Americans with public pensions get 47% of their pre-retirement pay, that's including Social Security. The typical public pension pays 1/3 to 1/4 the pre-retirement, not the huge amounts you hear in unusual cases.
DO YOU BELIEVE THAT WE SHOULD WANT, CONCERN OURSELVES, SPEND MOST OF OUR WORK TOWARDS, SPEND THE LIONS SHARE OF THE TAX REVENUE ON,......................................... WHAT.......... YOU ..............WANT, OR IS BEST FOR SOMEONE ELSE OTHER THAN AMERICA AND AMERICANS......... OR .....................
SHOULD YOU WANT, CONCERN YOURSELF, SPEND MOST OF YOUR WORK TOWARDS, SPEND THE LIONS SHARE OF THE TAX REVENUE ON, .............................................. WHAT............ WE.............. WANT, OR IS BEST FOR AMERICA AND AMERICANS?
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