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When compared to other similar countries, retirement benefits in the United States are relatively modest. A report from CNBC took a closer look at retirement systems in numerous countries and found the U.S. to be performing lower than the average. Retirees in the U.S. generally receive about 47 percent of their pre-retirement income on Social Security. Similar programs in Europe and elsewhere generally pay about 68 percent of pre-retirement income.
In the 2011 Melbourne Mercer Global Pensions Index, the U.S. was given a middling grade of "C," along with France, Singapore, Brazil, Poland and Germany.
A country given a C has “a system that has some good features, but also has major risks and/or shortcomings that should be addressed,” the report states. “Without these improvements, its efficacy and/or long-term sustainability can be questioned.”
The United States ranked close to average among 16 countries in adequacy of benefits provided and above average in sustainability, the likelihood that the system can maintain the benefits in the future. It fell short, however, on a sub-index focused on the private sector pension system.
The U.S. could take steps for a better score, the report said, including raising the minimum benefit for low-income retirees, improving benefits vesting, and further limiting access to funds before retirement.
The Service Employees International Union, among other organizations, is calling upon Washington to improve the U.S. retirement system:
The fastest, most efficient and fairest way to improve retirement security in the United States is to strengthen Social Security. Social Security is often the sole source of retirement income for low wage workers who are less likely to have access to an employer-sponsored retirement plan. The problem with Social Security is that its retirement benefits are less than $1,200 per month for millions of low wage workers.
SEIU reports that the upper one percent of Americans have already stopped paying Social Security taxes for 2012 because of a cap on what earnings pay into the system. Currently, once someone reaches $110,100 of income they have paid Social Security taxes on, they pay no more into the system for the year. Eliminating this cap is widely seen as the easiest and fairest solution to shoring up the future of Social Security. SEIU has an action opportunity for citizens to contact Congress and demand they scrap the cap.
