Each year, Mercer and the CFA Institute publish the Global Pension Index, which scores 52 national retirement systems – covering about two-thirds of the world’s population – on how well they actually serve retirees. It isn’t a popularity contest. Systems are graded on adequacy (do benefits keep people comfortable?), sustainability (will the money still be there in 30 years?), and integrity (is the system well-run and trustworthy?).

In the most recent rankings, the United States came in 30th, with a score of 61.1 – a middling grade for the country with the largest and most sophisticated capital markets in the world. The top of the table is dominated by a handful of small, wealthy democracies: the Netherlands at 85.4, Iceland at roughly 84, and Denmark at 82.3, with Sweden close behind. If American markets are the envy of the world, why does its retirement system trail so far behind theirs?

The answer comes down to one habit those countries share – and it’s a habit any American can copy, even though the U.S. system won’t do it for you.

They don’t choose between growth and guarantees

The instinctive assumption is that the top-ranked countries must play it safe: lots of government pensions, little exposure to markets. The opposite is true. These systems are heavily invested in stocks and bonds. What sets them apart is that they pair that market growth with income designed to last as long as a retiree lives – and they do it automatically, for nearly everyone.

In other words, they refuse the either/or that trips up so many American retirees. They don’t make people choose between the upside of the market and the security of income that doesn’t run out. They build both into the same plan, by default.

Sweden is the clearest illustration, because its system actually gives each person a personal investment account. Every year, 18.5% of a Swede’s income goes toward retirement – comfortably inside the 15-20% range that retirement researchers commonly suggest workers aim to set aside. The bulk funds an income pension that pays for life and rises with national wages. But a slice – the “premium pension” – flows into an individual account where the worker picks their own funds and earns market returns, much like an American 401(k). The difference comes at retirement: that invested account is converted into income that pays out for life, rather than left as a lump sum to draw down and hope it lasts. A Swede ends up with both a market-driven nest egg and a paycheck designed to keep coming.

These are some of the most heavily invested systems on earth

If Sweden shows the structure, Iceland shows the scale. Icelanders save more for retirement than almost anyone – a mandatory 15.5% of pay, among the highest rates in the developed world – and those contributions sit in investment funds worth roughly 180% of the country’s entire annual economic output, among the largest pension pools on the planet. That money is invested broadly across global markets, and after a full career it delivers a lifetime pension worth about 72% of a worker’s pre-retirement income. Iceland even has a voluntary top-up tier that closely resembles the American 401(k).

The Netherlands, the world’s top-ranked system, is in the middle of a major reform that’s moving its pensions toward – not away from – market exposure, shifting workers into accounts whose value depends on investment performance. Crucially, even as it embraces more market risk on the way in, it keeps the lifetime-income promise on the way out. The pattern is consistent across all of them: these aren’t timid, bond-only systems. They take real market risk to grow the money, then convert it into income that lasts for life

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