Top 20 Countries for Retirement Security: 2013

We're losing out to Slovakia. How often do we hear that?

The United States ranks 19^th worldwide in the retirement security of its citizens, just ahead of our British cousins, Natixis Global Asset Management reports in its annual index. The reasons are not new—an aging population is putting government resources under strain and Americans will need to pick up a bigger share of their retirement costs, especially as the number of retirees grows and the government's ability to support them fades.

The index gauges how well retired citizens live in 150 nations, based on measures of health, material well-being, finances and other factors.

The report notes that although the U.S. is the world's biggest pension market, it lags behind less-affluent nations on measures of income and health, according to the index. While the U.S. leads the world in per-capita health spending, individuals are still required to pay a portion of this expense on their own. That leaves many health costs in the hands of retirees and takes resources away from their other needs.

In contrast, it continues, Western European nations—backed by robust health care and retiree social programs—dominate the top of the rankings, taking the first 10 spots. "The message is clear: You will be called on to finance more of your retirement," John Hailer, NGAM's president and chief executive officer for the Americas and Asia, said in a statement. "Citizens of other industrialized nations can rely on strong social safety nets in old age, at least for now. In the U.S., we encourage workers to plan, save and invest, and promote policies that help them meet their future needs."

Demographic challenges

Like many other nations, the U.S. is grappling with significant demographic change, including a rapidly aging population, rising life expectancy rates and declining birth rates.

Globally, the number of people age 65 or older is on track to triple by 2050. By that time, the ratio of the working-age population to those over 65 in the U.S. is expected to drop from 5-to-1 to 2.8-to-1.2.

These trends are likely to diminish the government's ability to finance programs such as Social Security and Medicare, and will mean a heavier financial burden going forward for individuals saving for retirement.

Retirement savings deficit

The economic downturn has taken a major toll on retirement savings. Natixis cites a recent U.S. Senate report saying the country is facing a retirement savings deficit of $6.6 trillion, or nearly $57,000 per household. As a result, 53% of American workers 30 and older are on a path that will leave them unprepared for retirement, up significantly from 38% in 2011.

Compounding the issue, only half of all workers have access to employer-sponsored plans, and those who do participate often make the common mistakes of saving too little or investing too much in lower-returning products.

Individual responsibility

"The bottom line is that U.S. workers, like many of their counterparts across the globe, have to step up even more and take charge of their retirement futures," added Tracey Flaherty, NGAM's senior vice president for government relations and retirement strategies. "If these challenges aren't met, they may not have adequate income in retirement, with negative consequences for their health and overall quality of life."

Here, in ascending order, are the top 20 countries for retirement security: A U.S. postage stamp. 20. United Kingdom