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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The author Dinah Brin must not be paying much attention to what is happening in Europe. All you Lefties can salivate over the European social welfare states, but their way is unsustainable. See Greece as Exhibt A. Italy, Spain and a host of others will be introduced into evidence very soon. I lived in Europe for six years,and they DO NOT have a better lifestyle than us. Sure, in Germany you have free health care and can retire young, but they tax you over 50% of your income, then tax to death everything else you buy with a VAT tax (about 17%). Gas in Europe usually costs three times what gas in the US costs becuase of taxes. And in reality, the healthcare isn't free. You pay for it when you pay your taxes. Our friends in Germany complain to us about how expensive it is too just live. We live in bigger homes, have more discretionary income, and can afford more. European housing costs are astronomical compared to ours, and as a result, most Europeans live in the equivalent of small apartments. Utility costs in some European countries are obscene. They don't have it better. I know, I've lived there. They have a different style of life, but it is NOT better.
Most Americans don't rely on the government to take care of them. Its all a trade-off. Do you want the government taking control of your own life and making all your decisions for you? I don't. Thats why I went to college and grad school. The American way has always been self-reliance and taking care of yourself. Its sad that the greatest country in the world has been inundated with faux-socialists who want to keep putting the government in charge of everyone's lives. Go live in Europe for a few years, then get back to me.
we have the best retirement system in the world, shame on you if you dont take advantage
Plus maobama is trying to kill you off at age 75 anyway, with his maobamacare crap, so now you know how many years you will have upon retirement, retirement plus whatever it takes to get to 75
liberal idiots, you are voting for your own death warrant, that govt peep is NOT going to approve healthcare for you at that age so drink beer, get smoked up now because you arent going to live long after you quit working yep, communism at its finest
I wonder how many of the respondents on this page have any notion of the truth that most of the European countries surpass this country on their standards of living, which includes higher wages, and YES, higher taxes, which not only get them superior National health care, but also good retirement and disability insurance if you should become disabled. As expected, the propaganda rants from the soundbites on the right,. are prevalent here by some the arrogant and ignorant responses spewed.
There are several reasons, and there is an order (priority) here, for the Euro crises and not one was mentioned by the mass of detractors, which shows how little understanding or knowledge it takes when it comes to expelling gas. I don't want to try to educate anyone out there since they already know the answers. You want to blame this on the Democrats..how stupid...This is beyond politics..It is beyond Republicans and Democrats. Enjoy your stay...continue to support the best Democracy money can buy..so hang on to your guns and have a blessed and blissful day..cheers..
I find it interesting that the article failed to make any mention of the levels of income that were being replaced in the respective countries and the percentage of people that qualified for those benefits. I mean is it really better to get 106% of your income in a country where the average salary is $600 a month (Hungary)? Keep in mind that since we’re talking about other industrial nations it’s reasonable to assume that the cost of living is similar to what we have in the USA. Another point is that expecting the government to take care of you in your old age is ludicrous. We’ve all seen the tables that show how investing a minimal amount at a young age can set you up for financial security at retirement. If you couldn’t be bothered to make the effort for your own financial well-being; why should anyone else be concerned?
Another thing that doesn't get talked about a lot today is the fact that SS in the US was not intended to be a full retirement but rather only to aid in ones retirement. Now everyone thinks they will work their 35-40 years and will replace 70% or more of their last salary with SS. Hey i would love that myself but it's not realistic
Like many i've been expecting little or nothing from SS for over 20 years now and have been paying into my own retirement fund until it hurts. Now they are talking about taxing that? Unbelievable!
Big problem is Wall Street. There was a documentary(sorry,don't have name)on Frontline few years ago that showed what has happened since Wall street was allowed to start the whole 401K scam.
Companies no longer offer a pension,and the average rate of return combined with many having to use 401K funds early has harmed people's retirement. Employees who retired in the 70s and 80s have generous pensions, many doing great. Who benefited from the 401K legislation...hmmm..let's see...usual suspects, investment bankers,company executives with their ridiculous stock option packages....etc....seriously would any middle income people care one bit about the stock market if their retirement wasn't involved?
Something else I should have mentioned is that for example, the EU countries have invested their social security funds and those funds are agressively saught by hedge funds to have as investment sources. Here in the U.S. our funds get played with by Congress. Social Security is a true Ponzi scheme. Oh, the politicians get all upset if you say that, but they are professional liars anyway. All we do is print money to hand out for social entitlements, We have no reality base for the source of our funds. All we needed was an Obama and the whole thing is gonna go Ker - Fluie.
You know all those crazy investment e-mails you get from Nigeria? Well, the real ones originate from a KENYAN! And he's right here in the U.S. ! At 1600 Pennsylvania Avenue in Wash., D.C.
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