Australians are the second-most optimistic about retirement, according to new SSGA research that compared retirement satisfaction levels across eight countries.
SSGA's Global Retirement Reality Report polled 9400 people across Australia, US, UK, Netherlands, Sweden, Germany, Ireland and Italy.
The study charted the 9400 respondents' self-reported levels of happiness against how their country's retirement system fare on global rankings such as the Mercer Index and OECD.
Research found a disparity between the two.
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Australia ranked three on OECD data, second on Mercer's score. It was second most satisfied on the SSGA survey.
SSGA explains the disparity by three factors.
People feel most happy about their retirement where the country's retirement system is stable and policy-level changes to the system can erode trust.
"For example Italy has recently undergone painful reforms to the pension system and Germany and the Netherlands are on the cusp of reforms; this erodes trust. However, if these reforms are successfully implemented and individuals embrace their roles in the new system, these countries could look more like Sweden (one of the happiest retirement countries) with an established and well-understood, sustainable system," the report said.
Second, when people take individual ownership of their retirement savings and understand the choices that they can make, they feel more secure.
"Respondents in the US and Australia, where there is a long tradition of individual retirement responsibility through DC savings, were the happiest in our survey. Despite having lower assets, the UK and Ireland have potential to be moving towards these models."
Lastly, people who can assess the status of their retirement savings feel happier about hanging up the boots.
"The challenge faced by many is determining how much is "enough" and understanding whether savings will be sufficient. In addition, the study highlighted that few people understand how to convert a relatively large lump sum into a dependable income for life, making the definition of sufficiency elusive. Italian and Irish respondents, in particular, were concerned that they were not prepared for retirement."
According to numbers, Australia has the third-highest total pension assets compared to the gross domestic product (131%), trailing Netherlands (180%) and the US (150%).
We also score high on the Melbourne Mercer index (B+), the same as Netherlands and ahead of Ireland and Sweden (B), UK and Germany (C+) and Italy and the US (C).
Australia also has among the highest total coverage of private pension plans (76%), trailing Sweden (90%) and Netherlands (88%).