Australia has been ranked as one of the top countries in the world for retiree welfare, with New Zealand not far behind in 10th spot.
The 2015 Global Retirement Index (GRI), which is published by Natixis Global Asset Management and Core Data Research ranks countries based on the following:
- Material Wellbeing: examines retirees’ ability to live comfortably in retirement
- Health: evaluates retiree access to quality health services
- Finances in Retirement: considers access to quality financial services and the ability to preserve savings
- Quality of life: focuses on whether a country can provide a clean, safe environment in which to live
Largely due to their mandatory retirement savings schemes, Australia and New Zealand are the only non-European countries to have made it into the top 10, with Switzerland topping the list, followed by Norway. While Australia sits in third spot, it shares the position with Iceland, Netherlands, Sweden and Denmark and, as with all countries in the top 10, has the following features:
- a well-developed and growing industrialised economy with a strong financial system and regulations
- public policies that provide broad access to healthcare and other social services
- substantial public investment in infrastructure and technology.
Australia scored well in all categories and particularly in the areas of health and quality of life. Our economy performs well and according to Natixis Global, Australia not only has low levels of public debt and inflation, it also has strong bank balance sheets. Furthermore, it was noted that the country benefits from a strong welfare system and high income equality.
Australia does, however, have a black mark against it when it comes to tackling climate change and its levels of carbon dioxide emissions.
In its third year, the GRI assesses and ranks 150 countries worldwide and the results from these reports can be used to highlight:
- What can be learned from the factors separating top-ranking countries from the rest of the world.
- A wide range of risks that pose a threat to maintaining retirement security in any country.
- A growing expectation that no matter what country they come from, individuals will need to take on a greater share of the burden in funding their retirement.
Read the full report at ngma.natixis.com.
News that Australia ranks third in the top 10 countries for retirees may surprise those who are trying to manage on an Age Pension, so should we believe what we read?
Even the most thorough review of a country’s economy, health and welfare policies can, at best, only provide a picture of the average standard of living for retirees and the reality is often far removed from the tables and graphs contained in reports.
Ranking behind only Switzerland, an incredibly wealthy country often used as a tax haven by the rich and famous, and Norway, which has an advanced social security system, a future fund and a flat 36 per cent personal income tax on salary, on paper everything seems rosy for Australian retirees. However, given the reality is:
- a full single Age Pension is $1200 less per annum than the amount recommended for a modest lifestyle (ASFA Retirement Standard)
- the fees on our superannuation are some of the highest worldwide,
- our financial planning industry is one step away from descending into chaos due to the systemic conflict of interest amongst the major advisors and the succession of failed investment company collapses
- hospital waiting lists are alarmingly long – and getting worse
and the government is currently trying to pass legislation through the Senate that will only make the above worse; it would be foolish for us to accept this report as gospel.
There is no doubt that, in many aspects life in Australia is pretty cushy, but maybe we should ask some of the 46 per cent of retirees who are trying to live on a fixed income from an Age Pension. These retirees, largely through no fault of their own, often struggle to buy fresh food, can’t afford dental treatment, have to choose between filling a prescription and filling the car with fuel and simply can’t cut their utility bills any more due to ridiculously high service charges. Perhaps we should ask them if Australia deserves its third-place ranking on the latest GRI.
Do you think such reports are useful? In your opinion, does Australia actually compare favourably to the other countries on the list? Does it comfort you to know that Australia ranks third in the world?