America is an awful place to retire. At least, according to Natixis, worldwide asset management. We are ranked 18th in the current Global Retirement Index for “retirement security.” We are ahead of Slovenia, Malta, and Estonia. Still, the top ranks are dominated by Nordic or Germanic nations and Canada, Australia, New Zealand, Ireland, South Korea, and the Czech Republic.
Norway is ranked first. It’s difficult to say how much weight to assign these rankings. Natixis claims that the figures are based on 18 performance measures. These include apparent indicators like life expectancy, uninsured healthcare costs, and the dependence ratio of retirees to employees. “Bank nonperforming loans” and “biodiversity and habitat” are two more subtle indicators.
According to Natixis, the Czech Republic is the top country in the world in terms of “material well-being,” with Malta ranking eighth. The United States is not even in the top 25.
Meanwhile, the report raises several intriguing questions.
Wouldn’t it be strange (rather than hilarious) if those regions that don’t want immigrants started lobbying for them instead? According to the report, most of the world’s wealthiest countries will face a problem over the next two decades when they run out of young employees to support their elderly retirees.
In the United States, for example, there are only 3.5 persons of typical working age (ages 20 to 64) for every senior citizen over 65. By 2050, there will be 2.5 persons of working age for every elderly citizen. And we’re still in a much better position than most wealthy nations.
China will have a 2:1 ratio, whereas European countries like France and Germany will have less than two persons of ordinary working age for every elderly citizen. Japan, Spain, and Italy will be approaching 1:1 ratios. By 2050, Japan, the first country to face this demographic disaster, will have just approximately five working-age individuals for every four retirees.
Meanwhile, by 2050, China will have 370 million more elderly residents than America.
As previously said, welcoming highly talented immigrants is one of the globe’s most straightforward, easiest, lowest-risk, highest-reward policy alternatives.
When discussing highly qualified immigrants, it is not the case that unskilled workers are pushing down entry-level salaries for the native population. Biotech Ph. D.s do not step off the aircraft and begin undermining other people’s pay.
Congress appears to be uninterested in doing anything of the kind. Why should it, after all? These senators are unlikely to jeopardize their retirement plans if Uncle Sam runs out of money. So why should they be concerned? Instead, it’s probably better for their careers if they play politics and demagogue the subject to their base.
So, what makes Norway stand out in terms of retirement security? Here’s something that helps: For decades, they’ve invested their massive national pension system in global markets, just like any other fiduciary would. In America, Congress wastes our Social Security payments on worthless Treasury bonds, and predictably, the returns have been dismal.
That is something Congress might have changed years ago, and they might amend it next year. But, once again, why should they? As with legal immigration, the Social Security trust fund investment policy is as follows: If wrong actions by Congress lead to a retirement crisis in America, the 535 members of the House and Senate are unlikely to suffer.
Social Security cuts appear to be reserved for the poor, like taxes. This explains why icy Scandinavia may be a better place to retire than even America’s sunniest beaches.