U.S. Retirees Rank Third In Income, Third In Happiness--I'll Call That A Win.

Does money buy happiness? I don’t know, but it doesn’t much matter because U.S. retirees have plenty of both.

A new study finds that the U.S. ranks 14th out of 43 countries in terms of retirees’ quality of life. From this, I anticipate the usual fretting about Americans’ retirement saving and calls for radical reforms. But how seriously should you take these kinds of numbers? Answer: not at all. When it comes to two key factors – incomes and happiness – U.S. retirees are ranked third in the world. I’ll call that a win.

The Wall Street Journal reports on the Natixis Global Retirement Index, a new ranking of “how well retirees live in 43 nations based on 18 measures of health, wealth, quality of life and “material well-being” that affect citizens’ retirement security. The measures include per capita income, health-care costs and longevity figures published by organizations including the World Bank, the World Health Organization and the Organization for Economic Cooperation and Development.”

And how does the U.S. fare? Predictably, not well. “In this year’s study, the U.S. ranks 14th out of the 43 developed or rapidly developing countries Natixis ranked.”

But here’s the rub: cross-country comparisons like this are really hard to do well. Even for the United States alone there are significant shortcomings in the data used to measure retirement security. Since every country measures things slightly differently, the chances that you’ll get truly meaningful data that’s comparable from one country to the next is pretty small.

As a result, these international rankings often make do with whatever data is at hand. For instance, the Nataxis Index measures retirement quality using variables such as life expectancy at birth, average income per capita for the entire population, unemployment, income inequality, and so forth. I don’t remember hearing retirees complaining about their country’s carbon emissions or lack of biodiversity, but those are in there as well. Nataxis’s figures don’t say much about retirees’ quality of life or a retirement system’s capacity to help retirees’ maintain their pre-retirement standard of living. Their variables are the data equivalent of “Mr. Right Now” as opposed to “Mr. Right.”

I can’t claim to have perfect data, nor will I even attempt to create an “index” of retirement security. But I’ve got a couple of data points that are both understandable and meaningful.

Source:  Andrew Biggs contributor - I work on retirement policy, public sector pay and other issues. 
http://www.forbes.com/sites/andrewbiggs/2016/07/20/u-s-retirees-rank-third-in-income-third-in-happiness-ill-call-that-a-win/#5ae4a47f6da3