InvestmentNews talks to Natixis Center for Investor Insight director Dave Goodsell.
Improved financial stability and health outcomes in retirement have boosted sentiment among American adults, according to new research.
In fact, the US has gained slightly in a global ranking of retirement readiness, although there are still some major concerns that the post-working life that was anticipated by Americans will not be their reality.
The 2025 Global Retirement Index from Natixis Investment Managers reveals a complicated picture of retirement readiness in the United States, with the improved metrics clashing with the weaker labor market and declining happiness levels.
The GRI evaluates 44 countries across 18 factors grouped into four sub-indices: Finances, Material Well-being, Health, and Quality of Life. The United States posted mixed results:
- Finances in Retirement (10th place): The most notable improvement came in financial conditions, where the U.S. climbed five spots. Stronger metrics such as lower nonperforming loans and favorable interest rates supported this gain, though high levels of government debt continue to cast a shadow.
- Material Well-being (24th): Despite rising income per capita, widening income inequality and higher unemployment from a cooling labor market held the U.S. at 24th.
- Health (24th): The country rose from 27th last year, thanks to continued high health expenditures per capita and gains in life expectancy.
- Quality of Life (25th): Declines in happiness, especially among younger Americans struggling with loneliness, pushed the U.S. down two places.
InvestmentNews has been finding out more about the survey results from Dave Goodsell, executive director of the Natixis Center for Investor Insight.
“The U.S. ranks 21st in this year’s Global Retirement Index. That’s an improvement from last year, but it’s a noticeable decline from where we stood a decade ago; in 2015, the US ranked 14th,” he explains. “There have been gains in areas like finances and health, but income inequality, rising public debt, and slipping happiness scores are having an impact on overall performance.”
Looking at the global results, some peers have done worse, including Canada which has fallen 10 places over the decade from 20 to 10. For those doing well, Norway, Ireland, and Switzerland are the leaders, thanks to their mix of strong retirement finances and good levels of health and quality of life.
The US, for its part, does stand out for its investor optimism,” notes Goodsell. “Just 21% of Americans say it will take a “miracle” to retire securely, compared to 43% globally. But even with that optimism, America’s relative competitiveness has slipped over the past decade, and it faces the same demographic and economic pressures confronting much of the developed world.”
Savings shortfall
The report reveals a shortfall between what respondents have saved for retirement (approximately $1 million) and what they estimate they will need (approximately $1.5 million). But Goodsell highlights the generational variations in this regard.
For Boomers, the shortfall is almost negligible, at about $29,000, while Millennials having saved around $742,000 against a target of $1.44 million, leaving a $697,500 gap. However, Goodsell points out that context matters.
“The fact that investors under 45 already have three-quarters of a million dollars saved is impressive,” he says. “With 20 to 25 years of compounding still ahead, closing that gap is very realistic. If anything, the bigger issue is that Millennials may be underestimating what they’ll really need. At $1.4 million, their target may not be enough to sustain the lifestyle they envision, especially with inflation and longevity risk in play.”
The more worrying stats are around Gen Xers because as they approach their 60s they have less time to make up the shortfall in their savings and they’re balancing big-ticket financial responsibilities like college for kids, aging parents, and along with their own retirement.
“Gen X is really the ‘Jan Brady’ of demographics,” Goodsell says. “They’re sandwiched between Boomers and Millennials and too often overlooked in the retirement conversation. But their challenges are real. They’ve saved about $1.141 million, yet they believe they’ll need nearly $1.8 million, leaving them with a $650,000 gap, the largest of any generation. Unlike Millennials, who still have decades of compounding ahead, Gen X is staring down retirement with less time and more obligations.”
Gen X’s resilient nature as the generation of ‘latchkey kids’ could be a risk as they do what they have always tended to do and go it alone, rather than get the advice they need.
“You can’t afford to be overlooked, and you can’t afford to overlook your own needs,” warns Goodsell. “Breaking the self-sufficiency habit and getting professional guidance may be the most important step to build a more secure path to retirement.”
Nearly half of all survey respondents cite fear of outliving their savings as their biggest worry, while other anxieties include potential cuts to government benefits with 76% believe ballooning federal debt makes this likely, and the erosive effect of persistent inflation.
Getting proactive
Sixty-seven percent of respondents say inflation is reducing the future value of their nest eggs, and 41% go further, saying it is “killing” their retirement dreams. But Americans are taking steps to address these potential headwinds that threaten to disrupt their retirement dreams.
The survey shows that 64% are saving more, nearly half are building long-term financial plans, and a third are calculating future costs or consulting advisors. For those already retired, 43% describe themselves as “living the dream,” and nearly 70% who worked with a financial advisor found it the single most helpful step toward security.
Goodsell says that the path forward comes down to three levers: time, contributions, and portfolio construction.
“Starting early, automating increases to savings rates, and maintaining discipline through market ups and downs can make a meaningful difference,” he says. “Making full use of employer-sponsored plans, diversifying portfolios, and setting realistic return expectations are equally important.”
But maintaining spending power in retirement adds to the complexity of retirement planning.
“That means diversifying retirement income sources – personal savings, Social Security, and insurance products – to help manage risks like longevity and inflation,” Goodsell says. “The key message is pragmatic and clear: a disciplined approach, realistic expectations, and professional guidance are essential to narrowing the gap and achieving retirement security.”