The United States retirement system earned a C+ grade in the 2026 Marsh CFA Institute Global Pension Index, a score that places it behind more than two dozen developed nations and underscores the widening gap between public promises and funded reality. The index, now in its 18th year, evaluates 55 retirement systems covering roughly two-thirds of the world's population, using three criteria: adequacy, sustainability, and integrity.
The U.S. posted an overall score of 61.6, up marginally from 61.1 in 2025, but its sustainability sub-score fell to 57.1 from 59.9. That decline signals that the long-term fiscal trajectory is worsening, even as other components improve. The index's authors note that a C+ grade indicates a system with "some good features but also major risks and shortcomings," a description that aligns closely with the challenges advisors already confront: Social Security's projected shortfalls, uneven access to workplace plans, and retirees living longer than their savings were designed to support.
Global leaders and the U.S. gap
The Netherlands topped the 2026 ranking with a score of 85.8, followed by Denmark (84.1) and Iceland (84.0). Australia broke into the top tier for the first time, earning an A grade with 80.6. The six A-rated systems—the Netherlands, Denmark, Iceland, Singapore, Israel, and Australia—share common features: near-universal coverage, robust governance, and funded structures that do not rely solely on pay-as-you-go financing. The U.S., by contrast, leans heavily on Social Security, a pay-as-you-go program, and a voluntary 401(k)/403(b) system that leaves many workers without any employer-sponsored savings vehicle.
For advisors, the index's findings reinforce the need to build retirement income strategies that do not depend on public programs alone. As longevity risk reshapes glide paths, the gap between what Social Security can provide and what clients will need is widening.
Demographic pressures intensify
This year's index includes a dedicated chapter on aging populations, with data from the United Nations World Population Prospects 2024. Globally, 43 of the 55 systems now have fertility rates below the replacement level of 2.1, and 23 are below 1.5. Life expectancy at age 65 in more developed regions has risen by about 50.9% since 1950, to 20 years; at age 80, it has grown by 68.8%, to 10 years. These figures translate directly into longer retirement income horizons and extended periods of portfolio withdrawal risk.
"Pension systems are under real strain," said Christine Mahoney, Global Defined Benefit and Defined Contribution Leader at Marsh People and Investments. "Governments that clarify their pension objectives, strengthen funding, and build flexibility into retirement design will be far better positioned to deliver dignified, secure retirements." Mona Naqvi, Managing Director of the CFA Institute Research and Policy Center, added that delivering reliable income amid demographic shifts requires sound system design and governance, alongside careful oversight of investments by fiduciaries.
Three reforms recommended
The index recommends three policy priorities: establishing clear objectives for retirement systems, strengthening funding of future obligations, and building greater flexibility into retirement ages and product design. On flexibility, the report is blunt: traditional retirement ages of 60 or 65 are increasingly out of step with longer, healthier lives, and the rise of gig work and part-time employment blurs the line between work and retirement. Fixed ages and inflexible structures can discourage older workers who are willing and able to remain active.
Tim Jenkins, lead author and Partner at Marsh People and Investments, said flexibility is no longer optional. "Retirement design must become more flexible—in when people access income, in how products are structured, and in how we think about the line between work and retirement." For U.S. advisors, this has direct practice implications. Clients transitioning from accumulation to decumulation, especially those with defined contribution balances, need more sophisticated income sequencing, longevity protection, and phased retirement planning than most current product menus offer.
The findings also echo other industry research. A recent LIMRA survey found that 60% of pre-retirees skip advisors, even as 88% worry about retirement income. Similarly, F&G research shows 51% of pre-retirees plan semi-retirement, a trend that will require advisors to rethink traditional retirement timelines. As the index makes clear, the U.S. system's C+ grade is a call to action for both policymakers and the advisors who help clients navigate an increasingly uncertain retirement landscape.
