The Albany Gazette - The World's Best Retirement Systems Share One Habit. Americans Have to Build It Alone.

SAN DIEGO, CA / ACCESS Newswire / June 23, 2026 / Each year, Mercer and the CFA Institute publish the Global Pension Index, which scores 52 national retirement systems - covering about two-thirds of the world's population - on how well they actually serve retirees. It isn't a popularity contest. Systems are graded on adequacy (do benefits keep people comfortable?), sustainability (will the money still be there in 30 years?), and integrity (is the system well-run and trustworthy?).

In the most recent rankings, the United States came in 30th, with a score of 61.1 - a middling grade for the country with the largest and most sophisticated capital markets in the world. The top of the table is dominated by a handful of small, wealthy democracies: the Netherlands at 85.4, Iceland at roughly 84, and Denmark at 82.3, with Sweden close behind. If American markets are the envy of the world, why does its retirement system trail so far behind theirs?

The answer comes down to one habit those countries share - and it's a habit any American can copy, even though the U.S. system won't do it for you.

They don't choose between growth and guarantees

The instinctive assumption is that the top-ranked countries must play it safe: lots of government pensions, little exposure to markets. The opposite is true. These systems are heavily invested in stocks and bonds. What sets them apart is that they pair that market growth with income designed to last as long as a retiree lives - and they do it automatically, for nearly everyone.

In other words, they refuse the either/or that trips up so many American retirees. They don't make people choose between the upside of the market and the security of income that doesn't run out. They build both into the same plan, by default.

Sweden is the clearest illustration, because its system actually gives each person a personal investment account. Every year, 18.5% of a Swede's income goes toward retirement - comfortably inside the 15-20% range that retirement researchers commonly suggest workers aim to set aside. The bulk funds an income pension that pays for life and rises with national wages. But a slice - the "premium pension" - flows into an individual account where the worker picks their own funds and earns market returns, much like an American 401(k). The difference comes at retirement: that invested account is converted into income that pays out for life, rather than left as a lump sum to draw down and hope it lasts. A Swede ends up with both a market-driven nest egg and a paycheck designed to keep coming.

These are some of the most heavily invested systems on earth

If Sweden shows the structure, Iceland shows the scale. Icelanders save more for retirement than almost anyone - a mandatory 15.5% of pay, among the highest rates in the developed world - and those contributions sit in investment funds worth roughly 180% of the country's entire annual economic output, among the largest pension pools on the planet. That money is invested broadly across global markets, and after a full career it delivers a lifetime pension worth about 72% of a worker's pre-retirement income. Iceland even has a voluntary top-up tier that closely resembles the American 401(k).

The Netherlands, the world's top-ranked system, is in the middle of a major reform that's moving its pensions toward - not away from - market exposure, shifting workers into accounts whose value depends on investment performance. Crucially, even as it embraces more market risk on the way in, it keeps the lifetime-income promise on the way out. The pattern is consistent across all of them: these aren't timid, bond-only systems. They take real market risk to grow the money, then convert it into income that lasts for life.

What America got right - and what it left out

Here's the part that should reassure American savers: the U.S. nailed the first half. The 401(k) and IRA are excellent engines for accumulating wealth in the markets - the kind of design other countries have echoed in their own savings tiers. Where the U.S. falls short is the second half. There is no built-in, near-universal layer that turns those savings into lifetime income. Social Security is the only piece that does that for everyone, and it was never designed to be a retiree's entire income floor - only a foundation beneath it.

So the part the Dutch, Icelandic, Danish and Swedish systems handle automatically - converting a lifetime of savings into a lifetime of income - is, in America, left largely to the individual. Many people are never told this is even a decision. They spend 40 years accumulating, arrive at retirement with a balance, and are handed no instructions for turning it into a paycheck that lasts.

You can copy the architecture

You can't vote yourself a Dutch pension. But you can borrow the structure that makes those systems work and apply it inside your own financial plan. It comes down to two layers: a base of dependable lifetime income to cover your essential expenses - housing, food, utilities, insurance, healthcare - and invested growth for everything above that line. An income floor can give you the freedom to stay invested through downturns, because nothing essential depends on selling at the wrong moment. That's the same combination, in spirit, that the top-ranked countries engineer for their citizens.

None of this is magic, and the trade-offs are worth stating plainly. Those foreign systems are mandatory and collective; their benefits can flex with markets - Iceland trimmed promised payouts after the 2008 crash - and savers give up a degree of control in exchange for the security. In the U.S., building your own version of the income layer often means using insurance products whose guarantees depend on the financial strength of the issuing company, and which can carry fees, surrender periods, and reduced access to your money. It means making deliberate choices - ideally with a qualified fiduciary - about how much to guarantee, how much to keep liquid, and what you're giving up in return.

But the core insight is one most American retirees never hear: the best retirement systems in the world don't pick between growth and certainty. They run both, side by side. The only real difference is that they do it for their citizens - and Americans have to do on our own.

Source: Mercer and the CFA Institute, Mercer CFA Institute Global Pension Index 2025, mercer.com (last accessed June 17, 2026).

This article is published by Hafnia Financial, Inc., a California-registered investment adviser, and reflects the views of its author. It is provided for general educational purposes only. It is not investment, financial, tax, legal, or insurance advice; it does not create an advisory relationship; and it is not an offer or solicitation to buy any product or service.

Mr. Gleisner and Hafnia Financial receive advisory fees, and Mr. Gleisner also earns commissions from the sale of insurance products, including annuities. This creates a conflict of interest, because the strategies discussed here may be implemented through products that generate those commissions. You are under no obligation to act on any information in this article or to conduct any business through Mr. Gleisner or Hafnia Financial.

Any reference to dependable or guaranteed lifetime income describes insurance products whose guarantees are subject to the claims-paying ability and financial strength of the issuing insurer. Such products are not insured or guaranteed by any bank or government agency and may involve fees, surrender charges, holding periods, and reduced access to principal. Insurance products and their availability vary by state, and this article is not an offer or solicitation of insurance in any state where the author is not licensed. The author is insurance-licensed in AL, AZ, CA, CO, GA, MI, MO, NC, NV, OR, SC, TN, TX, and VA (CA Insurance Lic. #0D77385). Please consult a licensed professional about your own circumstances before acting.

Jan Gleisner is President of Hafnia Financial, Inc., a California-based registered investment adviser, and is also insurance-licensed (CA Insurance Lic. #0D77385). His firm helps people near retirement build income strategies designed to last a lifetime. He can be reached at (858) 750-6206.

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SOURCE: Hafnia Financial

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(L.Thomas--TAG)