Natixis Investment Managers recently conducted its annual Global Survey of Individual Investors. It revealed that about eight in 10 investors (81%) believe they must fund their own retirement as opposed to relying on private and public pensions.
This year’s findings reveal a significant rise from 2015 when just 67% of investors felt similarly. “In the end, their isolation is leading many to despair about their chances of achieving retirement security,” explained Natixis. The survey included 8,550 investors across 24 countries.
The current feeling of despondency around retirement resulted from the compound effects of both long- and short-term trends. On the long-term side, the move away from defined benefit pensions to defined contribution ones, alongside rapidly growing public debt, created pressure for investors. Short-term challenges such as the pandemic, market volatility, and inflation created ongoing stressors for investors and their retirement portfolios. Notably, investors across all wealth bands expressed similar growing concerns regarding their retirement.
“In just two short years, the number of individuals who thought it would take a miracle to achieve retirement security increased from 40% in 2021 to 45% in 2023,” Natixis wrote. “The fact that this is among affluent investors with $100,000 or more in investable assets shows just how pervasive funding concerns are.”
Millennials remain the most concerned about their retirement, from 47% in 2021 to 48% in 2023. Gen X is close on their heels, rising from 42% in 2021 to 47% last year. Baby boomers also expressed growing retirement security concerns, rising from 31% to 35% between 2021 and 2023.
About one in five investors (19%) believe that even $1 million in savings wouldn’t equate to affording retirement. Of those one in five, 18% have already amassed $1 million in savings.
A Look at Retirement Security in the U.S. and Globally
Natixis developed the Global Retirement Index, which measures 18 different factors of retirement security across 44 countries. It’s broken down into four thematic subindexes: health, retirement finances, quality of life, and material well-being. The data used is sourced from a variety of reliable international organizations as well as academic sources and looks at the retiree demographic within each country. Each factor is scored, and countries receive an overall ranking that is tracked year over year.
This year, Switzerland surpassed Norway in becoming the best-performing country for retirement security (82%). Iceland followed in third, and Ireland took fourth place. The Netherlands, Luxembourg, and Australia rounded out the top seven.
The U.S. ranked 22nd for retirement security (70%), a decline from 20th in 2023. A drop in material well-being, in addition to quality-of-life measurements, proved a drag this year. Within material well-being, a notable erosion related to unemployment and a cooling labor market created challenging outlooks for retirees. A similar decline in the happiness indicator proved a drag on quality of life data.
“The decline in happiness among Americans, particularly those under 30, is attributed partly to decreased subjective well-being,” Natixis noted. Researchers indicated that social connections played a significant role in this deterioration.
The U.S. increased by 2% in the subindex related to health on increased life expectancy but still slipped two places in the rankings to 27th. It maintains the top ranking for health expenditure per capita but sits in 33rd place overall, lagging behind most of its developed country peers.
Within the finances in retirement measurements, the U.S. fell to 15th. “The country secures a spot in the top 20 for several indicators, namely the tax pressure, interest rate, bank nonperforming loans, and the old-age dependency indicators,” according to Natixis.
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