Why America’s Retirement System Ranks 30th in the World — and What You Can Do About It
Each year, Mercer and the CFA Institute publish the Global Pension Index, which scores 52 national retirement systems — covering about two-thirds of the world’s population — on how well they actually serve retirees. It isn’t a popularity contest. Systems are graded on adequacy (do benefits keep people comfortable?), sustainability (will the money still be there in 30 years?), and integrity (is the system well-run and trustworthy?).
In the most recent rankings (the 2025 index, published in October 2025), the United States came in 30th, with a score of 61.1 — a C+, and a middling grade for the country with the largest and most sophisticated capital markets in the world. The top of the table belongs to the Netherlands at 85.4, Iceland at 84.0, and Denmark at 82.3, with Singapore and Israel also earning A grades. If American markets are the envy of the world, why does its retirement system trail so far behind theirs?
The answer comes down to one habit those countries share — and it’s a habit any American can adopt, even though the U.S. system won’t do it for you.
The countries at the top don’t make you choose between growth and guarantees. The instinctive assumption is that they must play it safe: lots of government pensions, little exposure to markets. The opposite is true. These systems are heavily invested in stocks and bonds. What sets them apart is that they pair that market growth with income designed to last as long as you live — and they do it systematically, for nearly everyone.
In other words, they avoid the either/or that trips up so many American retirees. They don’t make you pick between the upside of the market and the security of income you can’t outlive. They build both into the same plan, by default.
Sweden is a clear illustration, because its system actually gives each person a personal investment account. Every year, 18.5% of a Swede’s pensionable income goes toward retirement — within the 15 to 20 percent of income that many planners suggest saving over a working career. Most of it, 16 points, goes into a national income pension, a pay-as-you-go system in which each worker’s contributions are tracked in a notional account. The other 2.5 points go into a personal premium pension account that the worker invests in funds of their choosing. At retirement, the worker can turn that premium pension into a lifetime payout, in the form of a life annuity, or keep it invested in funds. Sweden scores 78.2 on the index, a B+, the sixth-highest of the 52 systems. Market growth and lifetime income, in the same system, for everyone.
The Netherlands, the top-ranked system in the index at 85.4, shows the same principle at scale. Most Dutch workers are covered by an occupational pension fund tied to their employer’s sector or company — coverage that is effectively mandatory once a collective labor agreement is in place, even though no single national law requires every worker to join. Those funds are professionally managed and pooled to reduce costs. The system is now in the middle of a multiyear, government-mandated transition from a mostly collective, defined-benefit design toward a more individual, defined-contribution one; Mercer and the CFA Institute note that despite the change, the system is expected to keep providing very good benefits, backed by a large asset base and close regulation
The American retirement system isn’t designed around a default. It’s designed around optionality. You may have access to a 401(k) — or you may not. You may enroll — or you may not. You may contribute enough — or you may not. You may invest thoughtfully — or you may not. You may convert your savings into income at retirement — or you may simply spend it down, hoping the money lasts.
Every one of those steps is a decision point where things can go wrong. And because the consequences of getting it wrong show up 30 years later rather than immediately, many people don’t notice they’ve made a mistake until it’s too late to fix it.
The countries at the top of the Mercer index have addressed this by removing the optionality. Contributions happen automatically. Enrollment is default. Professional management is the rule, not the exception. Lifetime income options are built in. The result is that these systems score far higher on adequacy, sustainability, and integrity — not because workers are smarter or more disciplined, but because the system doesn’t ask them to be.
None of this means American workers are helpless. The tools exist. What’s missing is the structure that deploys them automatically — and that’s something a well-designed personal financial plan can partially replicate.
Contribution rate. The most important variable in retirement savings is how much you put in, starting as early as possible. If you have access to a 401(k) or similar plan with an employer match, contributing at least enough to capture the full match is the minimum threshold. Many planners suggest aiming for 15% or more of gross income over a full working career if circumstances allow.
Investment allocation. Money that isn’t invested in assets with growth potential can’t compound meaningfully over time. The appropriate level of equity exposure depends on your time horizon, risk capacity, and overall financial picture — factors that vary significantly from one person to the next. A qualified financial professional can help you determine what is suitable for your situation.
Income planning. The conversion of savings into income is the step most Americans have no plan for. How you draw down retirement assets — the sequence, the sources, the tax treatment — can meaningfully affect how long the money lasts. This is one area where professional planning adds real value, and where differences in individual circumstances make general rules unreliable. Consulting with a qualified financial and tax professional is advisable.
Social Security optimization. For most private-sector workers, Social Security will be the only guaranteed lifetime income they have. The decision of when to claim — which can be made any time between 62 and 70 — affects your monthly benefit for life. The right answer depends on your health, your spouse’s situation, your other income sources, and your tax situation. A qualified professional can help you model the options.
Since this piece is about lifetime income, I should be plain about the tool many people use to build it privately. I’ve spent more than twenty years in this business, and I’ll say plainly that an annuity is a trade, and it’s worth knowing the terms. You hand an insurance company a sum of money, and it hands you a promise. The promise is only as good as the company making it; no government agency stands behind it the way the F.D.I.C. stands behind a bank deposit. Your money is usually committed for a period of years, and leaving early costs you a surrender charge. The growth is capped or shared with the insurer. Income riders, the add-ons that turn the contract into a lifetime paycheck, often carry an annual fee, and what your heirs receive depends on the payout option you chose at the start. For some households the trade is plainly worth it. For others it isn’t, and the job of a good adviser is to tell you which you are.
The countries that outrank the United States aren’t doing something exotic. They’re doing something disciplined and systematic: they take the decisions that most people will otherwise defer or avoid, and they automate them. Contributions happen. Investments are managed. Income is structured.
Americans who want to replicate those outcomes have to build that structure for themselves. It requires intentional planning, consistent execution, and a willingness to revisit the plan as circumstances change. The good news is that the tools are there. The question is whether you’re using them — and whether your current approach would hold up against the standards of the systems that rank at the top of the world.
Sources: Mercer LLC and CFA Institute, 2025 Mercer CFA Institute Global Pension Index, full report (published Oct. 15, 2025) and accompanying CFA Institute and Mercer newsroom releases, “As Economies Face Pressures to Adapt Pension Systems…” (Oct. 15, 2025); InvestmentNews, “US pension system holds steady as global peers advance, Mercer index shows”; Max Planck Institute for Social Law and Social Policy, Pension Maps, Sweden: Statutory Old-Age Pension Scheme. The United States’ rank of 30th and Sweden’s rank of 6th (of 52 systems) are calculated from the index’s published overall scores, which Mercer and the CFA Institute list by country rather than by rank order. Figures are the most recent available as of September 21, 2026.
ABOUT THE AUTHOR AND DISCLOSURES
Jan Gleisner is President of Hafnia Financial, Inc., a California-based registered investment adviser (CRD #315096), and holds insurance licenses (CA Insurance Lic. #0D77385). He holds the Series 65 and is President of Hafnia Insurance Services, Inc. (CA Insurance Lic. #6020269), an independent insurance agency in San Diego. His firm helps people near retirement build income strategies designed to last a lifetime. He can be reached at (858) 345-9001.
Mr. Gleisner and Hafnia Financial, Inc. receive advisory fees, and Mr. Gleisner also earns commissions from the sale of insurance products, including annuities. This creates a conflict of interest, because the strategies discussed here may be implemented through products that generate those commissions. Any reference to dependable or guaranteed lifetime income describes insurance products whose guarantees are subject to the claims-paying ability and financial strength of the issuing insurer. Such products are not insured or guaranteed by any bank or government agency and may involve fees, surrender charges, holding periods, and reduced access to principal. Insurance products and their availability vary by state. The author is insurance-licensed in California and multiple other states. Please consult a qualified tax professional or attorney regarding your individual tax and legal circumstances before making any decisions based on this article.
This article is for educational and informational purposes only. It is not personalized investment, insurance, tax, or legal advice, and it is not an offer or solicitation to buy any security or insurance product. Advisory clients of Hafnia Financial, Inc. are under no obligation to purchase insurance products through Mr. Gleisner or any affiliated entity. If you contact us, a licensed insurance agent may contact you. Index scores and other figures are from the third-party sources named in the article and were current as of September 2026. Full disclosures are available on request at compliance@hafniafin.com.