The US pension system stands proudly among the best in the world but needs some reform according to a new report.
An analysis of 71 pension systems globally by Allianz Life puts the US at number 10, but sustainability remains a concern including Social Security coverage gaps and retirement savings shortfalls, especially as inequality rises.
The stats show that the US old-age dependency ratio - a demographic measure that indicates the proportion of elderly dependents (typically aged 65 and older) compared to the working-age population – will rise from 28% currently to 35% over the next 25 years, a significant increase, although this is less so than in Europe.
The rankings shows that nine pension systems are less in need of reform than the one millions of Americans rely on for a financially secure retirement: Denmark, Netherlands, Sweden, Japan, New Zealand, Israel, Australia, the UK, and Norway. The scores range from 1 (no need for reform) to 7 (acute need for reform) with the US at 3.2. With Denmark topping the league with a score of 2.3, there is room for improvement globally.
But the report highlights that pensions and retirement savings are becoming a key part of the inequality story, in the US and elsewhere.
Despite a well-developed pension system, there is concern that many Americans may not be saving enough for retirement. This is partly due to opt-out provisions and premature withdrawals, as seen during the COVID-19 pandemic, which depleted some pension reserves.
But the pension gap can be narrowed, helped by policies that encourage participation in workplace retirement plans but also in ensuring that workers who stay employed until older ages do not face discrimination.
“Gen Xers need to save more to ensure their desired standard of living in old age – that's indisputable,” said Ludovic Subran, chief economist at Allianz. “But we must not just look at one side of the equation, the savings efforts of households. It is crucial to think about pension security and capital market development together. Retirement savings must be invested profitably in future growth and innovation. This is the key to overcoming demographic change (as well as climate change).”
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.