Here's the Key to Retirement Security

Workers in 18 countries enjoy greater retirement security than in the U.S., new research shows. The ranking looks at 150 nations and places the U.S. behind South Korea and France, among others, and one notch above Slovenia.

Northern Europe dominates the top of the list with Switzerland (1), Norway (2), Iceland (4), Netherlands (5), Sweden (6), and Denmark (7) all making the top 10. These nations have relatively high tax burdens. But they also have high per capita income and a narrow or improving gap in income equality, key metrics in the 2015 Global Retirement Index from Natixis, a global asset manager. Universal healthcare and sound government finances also boost scores in Switzerland and Norway.

Australia (3) and New Zealand (10) score highly based largely on mandatory retirement savings programs that have put their pension systems on firm footing. Austria (8) and Germany (9) round out the top 10. Researchers note that all the countries at the top of the list share three important traits:

• A growing industrialized economy with a strong financial system and regulations;
• Broad access to healthcare and other social services; and
• Substantial public investment in infrastructure and technology.

The ranking looks at four chief areas: good health and access to quality health services, enough material means to live a comfortable life, access to quality financial services, and a clean and safe environment in which to live.

Part of what holds the U.S. back is growing income inequality, which means resources aren’t available to all Americans, the report concludes. The U.S. also has fewer doctors and hospital beds relative to population than many developed nations.

The report's ranking criteria are far from perfect. The healthcare spending and social services components that give European countries a lift may not be not sustainable given demographic shifts that have more older people living longer. Meanwhile, healthcare spending doesn't directly correlate with health in retirement.

Still, the report makes a valuable point: Much of what makes for a secure retirement is out of the control of individuals, who can’t build a hospital, balance the federal budget or fix the pension system. What individuals can and should do, though, is beef up personal savings. Personal responsibility will become increasingly important everywhere as populations age and strain state budgets around the globe.

Yet a lot of people aren’t up to the challenge, the survey concludes. Only 16% of individuals surveyed in 14 countries had a very strong understanding of the annual income they will need to live comfortably in retirement. Another 37% had no knowledge of their retirement income goal. More than half do not have clear financial goals and 78% say that when making investment decisions they rely on gut instincts alone.