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As those workers age, younger workers step up to continue the cycle.
However, cracks are starting to form in pension systems worldwide.
The Netherlands
The Netherlands often receives top marks for its pension system.
It currently offers benefits to residents once they reach age 67.
Residents accumulate 2% of the pensions value each year they live or work in the Netherlands.
A recent Mercer study found the Netherlands to have a first-rate pension.
The Netherlands is partly addressing the issue by tying the standard retirement age to gains in life expectancy.
Iceland
Iceland is another well-ranked pension.
The current full pension benefit is ISK 3,439,428, roughly $25,000 annually.
It also notes concerns about government debt, which may strain the pension system in the future.
However, a reduced pension is available at age 63 to those withat least 35 contribution years.
In 2023, the average monthly pension benefit was 1,550.
Mercer ranks Germanys pension system 19th out of the 47 retirement systems examined.
To correct the problem, contributions to the pension fund will need to increase.
Mercer ranks it the 22nd-best pension, falling just behind Hong Kong.
In the U.S., retirees receive benefits based on lifetime earnings, adjusted for inflation.
Mercer notes several problems with Social Security.
Workers taking benefits early strains the system since fewer contributions are coming in and more money is going out.
Japan
Japans retirement system includes two tiers abasic flat-rate planavailable for self-employed individuals and an earnings-related employee plan.
To get the full benefit, residents must make 40 years of contributions.
A reduced benefit is available forshorter contribution periods.
Mercer ranks Japans pension system 30th, citing significant issues with its long-term sustainability.
Mercer suggests increasing the pension age or encouraging workers to take the benefit while continuing to work.
Another potential solution is increasing private pension availability, which can reduce the strain on government resources.
Austria has a statutory retirement age of 65 for men and 60 for women.
However, the country will incrementally raise womens retirement age beginning this year.
Pensioners withat least 40 yearsof contributions receive a minimum of 1,364.11.
Mercer placed Austria among the worst pensions, highlighting concerns about its sustainability.
It recommends increasing the retirement age to reduce outflows of available funds and encouraging individuals to work longer.
However, many developed countries share one constant aging populations with fewer new births.
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