The Motley Fool

Does Australia have the best retirement system in the world?

Australia’s retirement system has been ranked by the Melbourne Mercer Global Pensions Index.

According to the ratings, the top 10 are the Netherlands, Denmark, Australia, Finland, Sweden, Norway, Singapore, New Zealand, Canada and Chile.

Australia got a ‘B+ rating’ according to reporting by the Australian Financial Review and Bloomberg, beaten only by Denmark and the Netherlands which received A ratings.

There were 40 metrics used to assess the different systems on whether a system leads to better financial outcomes for retirees, whether it’s sustainable and whether it has the trust & confidence of the community.

The report’s author and Mercer senior partner David Knox said “Systems around the world are facing unprecedented life expectancy and rising pressure on public resources to support the health and welfare of older citizens. It’s imperative that policy makers reflect on the strengths and weaknesses of their systems to ensure stronger long-term outcomes for the retirees of the future.”

After the royal commission, businesses like AMP Limited (ASX: AMP) and IOOF Holdings Limited (ASX: IFL) want to be the choice for retirees and savers, so they’re shifting to a more client-focused strategy.

It could be a good move considering the big banks of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) are stepping back from the financial advice sector.

Other businesses are also benefiting from the royal commission fallout including EQT Holdings Ltd (ASX: EQT), Netwealth Group Ltd (ASX: NWL) and Hub24 Ltd (ASX: HUB).

Having a strong retirement system is good for the economy. It means retirees can have more discretionary spending in their golden years and it also hopefully means less money is needed from the government to fund the aged pension. It’s good for everybody. The only argument against more money in the superannuation is that it delays short-term spending for the economy. 

Foolish takeaway

There are plenty of shares like Challenger Ltd (ASX: CGF) trying to capitalise from the big growth in retirement funds. But a tailwind is not guaranteed to turn into earnings growth, at least over the shorter-term.

Retirement tailwinds or not, I think these ASX dividend shares are some of the best options on the ASX for retirement or just as a source of income.

Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

Click here now to access this free report.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Hub24 Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.