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28 Countries With Better Pensions Than the US, According to Experts

October 30, 2024

3 min Read

Written by Vance Cariaga

Edited by Rebekah Evans

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The U.S. has the biggest economy in the world by a wide margin, with an annual GDP that is nearly as big as the next three countries combined, according to Worldometer.com. But when it comes to sharing all that wealth with its oldest citizens, the U.S. lags well behind the top global performers.

The U.S. ranked number 29 out of 48 countries analyzed based on quality of retirement income systems, according to the 2024 Mercer CFA Institute Global Pension Index. That ranking represented a step backwards from last year, when the U.S. placed number 22 out of 47 countries analyzed, though the U.S. did get the same C+ score both years.

Much of the U.S. grade was based on its Social Security system, though Mercer also looked at private pension and retirement plans. If you want to retire comfortably in the U.S., you need to either strike it rich or invest a lot of money in a 401(k) or other private retirement plan because Social Security alone can barely cover the bills for most retirees.

The US Pension System

In its 2024 report, released earlier this month, Mercer scored countries based on three main categories: adequacy, sustainability and integrity. Adequacy measures the amount of money pensioners receive and how well it helps them financially. Sustainability looks at whether the system can keep delivering, while integrity gauges a system’s trustworthiness.

The top countries according to the Mercer index are the Netherlands, Iceland, Denmark and Israel. All received “A” grades, with overall scores above 80. The average overall index score across all countries analyzed was 63.4. The U.S. overall score was 60.4.

Here’s a breakdown of how the U.S. scored in specific categories:

Adequacy score: 63.9 (No. 30 overall)
Sustainability score: 58.4 (No. 19 overall)
Integrity score: 57.5 (No. 46 overall)

The integrity score was the third-lowest among the countries analyzed by Mercer. In its report, Mercer said the overall U.S. system could be improved by the following:

Raising the minimum pension for low-income retirees.
Improving the vesting of benefits for all plan members and maintaining the real value of retained benefits through to retirement.
Reducing “preretirement leakage” by further limiting access to retirement funds before retirement.
Introducing a requirement that part of the retirement benefit be taken as an income stream.