The U.S. retirement system recently earned a C+ — here’s how to give your retirement savings an A

A new study of retirement systems around the world found that the U.S. system is under pressure. But, that doesn’t mean that you can’t still retire comfortably. The newest Mercer CFA Institute’s 2023 Global Pension Index, released Tuesday, rates retirement income systems across the world using the weighted average of the adequacy, sustainability and integrity of the systems. The U.S. earned a C+, with 63 out of 100 possible points and an overall ranking of 22 out of the 47 countries included in the study. The U.S. previously earned a C+ in the Institute’s 2022 study. Four countries — Netherlands, Iceland, Denmark and Israel — earned A’s, the top-tier of the rating system. Australia, Finland and Singapore earned B+ grades and Germany and Canada, among others, earned B’s. The U.S. retirement system’s C+ ranking puts it in the company of France, Spain, Colombia and Kazakhstan. The report states that these countries have “a system that has some good features but also has major risks,” and warns that “without these improvements, [their] efficacy and/or long-term sustainability can be questioned.” Doubts about the future solvency of the US Social Security system are not new. The Social Security Administration stated in its 2023 Annual Report that it can pay the full amount of benefits as specified under current law until 2033 — but after that, something will have to change. However, you can still save on your own to ensure a comfortable retirement. Here are some tips that will put you on the path to future prosperity.

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How to save more for retirement on your own

Saving for retirement on your own is a critical step to ensuring your future. There are several ways for Americans to save more for retirement, including:

• IRA contributions. Opening and contributing to an individual retirement account (IRA) can help you save for your retirement while enjoying certain tax advantages. For those looking for an IRA, we picked Charles Schwab’s IRA as a top pick for its $0 minimum deposit for active investing and 24/7 customer support access. We also picked Fidelity Investments’ IRA for having no commission fees for stock, ETF and options trades and no transaction fees on over 3,400 mutual funds.
• Raise your 401(k) contributions. If your job offers a 401(k) plan as a benefit, it could be a helpful tool to save more for the future. And, it could be worth setting up your account so that it automatically increases your contributions by 1% each year, generally up to a 10% or 15%  maximum.
• Save in an HSA. A health savings account can be used for retirement, and not just for healthcare expenses. While it requires a high-deductible healthcare plan to access, these plans offer tax-free growth and withdrawals for qualified expenses.
• Consider an annuity. Annuities can provide guaranteed lifetime income in retirement. In these contracts, insurance companies invest payments and eventually pay back the initial investment, plus interest and less the annuity’s fees. However, annuities aren’t the right option for everyone — make sure to fully understand the terms and information associated with a specific annuity before purchasing.

Bottom line

The U.S. retirement system got a passing grade for a second year in a row. However, saving on your own is more essential than ever to retire comfortably — opening an IRA, automatically increasing your 401(k) contributions and considering other investment options can help you secure your future.