Raw Data: Retirement Income Replacement Rates in the US vs. Other Rich Countries

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While Hillary Clinton and Bernie Sanders are finishing up their lovefest in New Hampshire, how about another chart comparing retirement in America to retirement in other rich countries? Don’t lie: you know you want it.

Here’s one that makes the US look a little worse than yesterday’s charts. It shows income replacement rates in all OECD countries: that is, the amount of income that retirees get compared to how much they earned when they were working. This is a very tricky number to compute because there are lots of different ways you can do it, and the OECD pension report spends several pages just outlining the various assumptions you can use. That said, here are their estimates for low-income workers when you include only public pensions like Social Security:

And here’s the same chart including all pension income, both public and private:

Once again, the United States relies more on private spending than most other countries. When you count only Social Security, the US looks pretty stingy, ranking seventh from the bottom for low-income workers. But when you include all sources of pension income, we look better than a majority of OECD counties—including famously generous ones like Belgium, France, and Germany.

Now, as I said, these numbers are tricky to compute, and in this case I’m fairly skeptical of them. The replacement rate for Social Security in the top chart looks way too low to me. Conversely, the replacement rate for all sources of pension income in the US looks too high. Neither number matches up to figures for low-income workers from places like the Congressional Budget Office and the Social Security Administration. But that may simply be because the OECD made different assumptions in their calculations.

In any case, this gives you a decent idea of how we stack up using simple income replacement rates as your metric.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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