The United States has become a less-desirable country for seniors to spend their retirement in, according to the 2022 Natixis Investment Managers Global Retirement Index as reported by Money.com. One of the major reasons for the United States slipping even further from 2021 rankings comes down to the way that global economic instability is specifically affecting the American senior demographic, and particularly in personal finances and other well-being metrics.
“The U.S. was ranked No. 18, down one spot from last year,” Money.com said in its report on the data. “Its score was dragged down by low metrics of material well-being and finances. The low material well-being ranking was the result of low scores pertaining to unemployment and income equality. Its low rating in the Finances category was chalked up to subpar performance for taxes, governance, bank loan portfolios and old-age dependency.”
However, the U.S. may be predisposed to lagging in performance when it comes to the measurement criteria according to Dave Goodsell, executive director of the Natixis Center for Investor Insight.
“The countries that perform well on this list tend to be smaller,” he told Money.com. “It’s hard to get consistency [in a country as large and diverse as the United States].”
Americans at or near retirement face challenges on numerous fronts including later-life employment, income inequality, the application of government tax and debt policies and the prices of essential goods like gasoline, food and medicine.
“In a year on track to be one of the worst on record to retire, the market downturn and sharp increase in food, gas, housing and medications have hit retirees particularly hard,” the Natixis Center says.
Inflation continues to ravage the global economy, and seniors are not spared from its impact on a fixed income. That is also true internationally, due in no small part to supply chain disruptions and increased energy prices caused by the invasion of Ukraine by the Russian military. Higher prices also naturally erode purchasing power.
“Natixis says the other major challenges are a shift in the interest rate environment and longer lifespans,” the Money.com report reads. “After a decade during which savers earned rock-bottom returns, the cost of borrowing has begun to climb, but returns on safe products often used by retirees remain paltry, increasing at a much slower rate.”