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What The U.S. Can Learn From Retirement plans in other Countries

Retirement is a big focus for Americans, and it’s no wonder why. According to the 2015 Barometer Poll, most Americans feel ill-prepared for their later years.

So how do other countries stack up when it comes to preparing citizens for retirement?

As it turns out, no one has quite got it figured out yet. Australia, The Netherlands, Canada and the UK have kick-started plans to help their citizens prepare for retirement; however, every country handles their retirement system a bit differently. By pulling good ideas from a few different markets, Americans may be on the right track to fixing retirement crisis.

What the US Can Learn from other countries

United Kingdom

Our neighbors across the pond may be a good place to start. Because the United Kingdom is a smaller country, retirement initiatives and other initiatives take hold more quickly.

Currently, the United Kingdom is putting effort to ensure that the money workers save can be use for retirement programs. They are suggesting that retirement savings be split into three stages. One that provides employees with steady income while protecting them against inflation. Another one is to provide a cash lump sum to utilize it for unexpected circumstances without impacting the retiree’s savings. The last one is to provide a lifetime income. The latter would be purchased over time from the drawn funds provided in the first stage.

With half of Americans without retirement funds and planning to rely on Social Security, a three-tier retirement plan could be the answer. The best part? It doesn’t have to be implemented by the government.

Savers should have multiple sources for stashing their money. Namely, a fund for medical and other expenses, a retirement fund for later years, and a current pot of money with which bills and necessary living expenses can be paid.

The United States is also currently toying with the idea of a national program to revamp retirement. Proposed by President Obama, myRa provides a starter savings account for individuals who don’t have access to sponsored retirement programs. Many states are working on a similar solution for residents without access to a workplace retirement option. This will allow residents to use the state program to save for retirement. 

The problem with this is that it will be more difficult for smaller companies with varying payroll systems, to facilitate withdrawals than it is for larger employers.  


They employ a similar program. Their model has experienced more success due to the fact that there are less than ten options for superannuation. This gives employers more available choices, which makes the employer’s participation more manageable.


In the Netherlands, employers have the option to reduce employee pensions if the funded status deteriorates. This allows employers and employees to share risk. This way companies can respond to any market stresses that may occur.

Additionally, the Netherlands along with Switzerland, they sponsor plans that combine money over a larger group which allows companies to lower costs. In order to provide employers who sponsor retirement plans the opportunity to respond to market stress, the United States is experimenting with multiple employer plans as well.

Does Raising the Bar Mean  Raising the Age of Retirement?

Another way other countries have revamped their retirement systems is to raise their retirement age to 70. Some European countries have gone so far as to automatically increase the retirement age. This increases as residents average life expectancy increases. The U.S. isn’t far behind, raising its age to 67 back in the 1980s. We remain with the same average age of retirement of 67 since it had a raise two decades ago.

The United States by implementing auto-enrollment and auto-escalation encourage people to save more. However, we are still away from figuring out how to ensure all citizens have access to retirement funds.

A broader range of retirement coverage that includes raising the age of retirement. But also, finding innovative ways to encourage individuals to save and making employees save at a higher percentage. The United States could potentially revamp its retirement system and assuage the current retirement crisis following this steps.

This is the right place if you worry about your future and retirement coverage.

We at the Storick Group have a pulse on the latest industry news and what it means for our clients. Your future deserves to be under protection. It starts with educating yourself about the financial resources available to help you save for retirement.