Millions of Americans have been doing what they’ve been told to build a nest egg; saving in a 401(k), contributing regularly and hoping it will be enough to retire one day.
But a major global report suggests the system itself may be falling short.
The Mercer CFA Institute Global Pension Index 2025, which evaluates retirement systems in more than 50 countries, gave the U.S. a C+ grade with a score of 61.1 out of 100 — putting it squarely in the middle of the global pack (1).
Singapore, Iceland and Denmark earned A ratings, which Mercer defines as having top-tier, trustworthy retirement systems that deliver strong benefits and are built to last. The U.S. system is ranked at C+ for having lagging systems with some perks but also some major flaws.
The C+ ranking matters because Americans are increasingly responsible for funding their own retirement. Over the past several decades, employers have moved away from traditional pensions toward defined-contribution plans such as 401(k)s and, according to the Committee on Health Education Labor and Pensions, this has put the onus on workers themselves to plan for retirement (2).
Many Americans believe they to save $1 million or more to retire comfortably, yet actual savings often fall far short of that target.
One study from the National Institute on Retirement Security found the median retirement savings for working-age Americans is a shocking $955 when workers with no savings are included (3).
Despite rising account balances for many during strong market years, retirement readiness remains uneven with the average 401(k) sitting at $146,400 (4).
At the same time, there are demographic factors at play. Aging populations, longer lifespans and fiscal pressures on government programs are making retirement security a growing policy challenge worldwide (5), and there are several changes that could make it more secure for retirees.
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American workers are switching jobs more often, living longer after they retire and facing cost-of-living increases. And guaranteed pensions have largely been replaced by do-it-yourself savings accounts like 401(k)s.
Congress has tried to bolster the system with the SECURE Act and SECURE 2.0 Act which expanded automatic enrollment and made it easier for some workers to access retirement plans, but there are still gaps in coverage, savings and long-term retirement income.
Here are five reforms outlined by Mercer’s global retirement leader, Chris Mahoney, in an article for Fortune that could make the difference (5).
Building a nest egg is part of the battle, but the real challenge is making sure it lasts for the rest of your life.
Many Americans bounce between jobs over the course of their careers, sometimes leaving a trail of retirement accounts behind them. Some workers cash out those balances instead of rolling them over, shrinking their long-term savings in the process.
There’s also the longevity factor with more than one in three 65-year-olds living to age 90 (6).
Experts say simpler rollover rules and clearer lifetime income options could help retirees stretch their savings over what could become a 30-year retirement.
Millions of Americans still don’t have access to a retirement plan at work, especially younger workers, part-timers and caregivers who step away from the workforce to raise children or care for family members.
Some policy ideas that could expand access would be:
Automatically re-enrolling workers who previously opted out
Expanding eligibility to younger workers
Allowing catch-up contributions for caregivers returning to the workforce
Some policymakers argue retirement plans should offer a broader range of investments.
In 2025, Donald Trump signed an executive order directing regulators to consider easing restrictions on some private-market investments inside retirement plans, which could eventually open the door for assets like private equity, venture capital or other alternatives.
Supporters say it could improve diversification and long-term returns. But many employers are holding back until regulators clarify rules around fees, liquidity and fiduciary protections.
Lawsuits are another growing problem, with companies that sponsor retirement plans facing legal challenges in recent years over plan fees and investment choices.
While those lawsuits can protect workers from extra fees, they can also create a sense of uncertainty for employers considering offering or expanding retirement plans. Some experts say policymakers should find ways to discourage frivolous lawsuits while still protecting workers’ savings.
Even though most new retirement contributions now flow into 401(k)s, traditional pensions still hold a huge share of retirement wealth.
Instead of letting them disappear entirely, some experts say policymakers should reinforce them. Ideas include lowering premiums paid to the Pension Benefit Guaranty Corporation, which insures private pensions, and encouraging pooled pension plans that let smaller employers offer pension-style benefits.
The C+ grade in the Mercer global index shows that America’s retirement system has room for improvement. The reform ideas outlined here could help strengthen the system, but we’ll have to wait and see what will be adopted to boost retirement security for Americans and when it will be rolled out.
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Mercer CFA Institute Global Pension Index 2025 (1); Senate Hearing Transcript via Congress.gov (2); National Institute on Retirement Security (3); Fidelity (4); Fortune (5); SSA (6);
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
