So where are the best places to be retired?
According to a new study, 2017 Global Retirement Index Report from Natixis Global Asset Management, the top 10 overall countries that rank highest overall are: Norway, Switzerland, Iceland, Sweden, New Zealand, Australia, Germany, Denmark, Netherlands and Luxembourg.
The United States fell 3 places this year and came in as the 17th best place to be retired (out of 43 ranked countries).
Retirement Security is a Problem Worldwide
Despite there being better and worse places to be retired, retirement security is actually a problem worldwide. If you are worried about your own retirement, know that you are not alone. The entire world population shares your woe.
Why? There are a few trends that will increase the tremendous pressure already being felt on the financial and medical systems in most countries:
- The global population is getting older. By 2050, the World Bank estimates that the global elder population will triple to 2.1 billion people.
- People are living longer – which currently means more years are spent in retirement.
A growing retired population that lives longer means that both institutions and individuals need more retirement resources than ever before.
How Are the Rankings Compiled? Where Are the Best Places to Be Retired in Each Category?
The Natixis survey creates an overall retirement security score that is based on 18 different performance indicators that are grouped into the following 4 categories:
1. Finances in Retirement: This category addresses: old-age dependency, bank non performing loans, inflation, interest rates, tax pressure, governance and government indebtedness.
These are the big external financial pressures that can impact an individual’s finances. The study says that: “Finances in Retirement is a particularly important index, as it reflects the strength of a country’s financial system and the ability of the government to provide for its citizens in retirement.”
The U.S. breaks into the top 10 on this measure, ranking 10th – behind Singapore, New Zealand, Chile, Switzerland, Australia, South Korea, Estonia, Canada and Norway.
2. Material Well Being: This category measures how well retirees can support themselves in retirement and looks at: income equality, income per capita and unemployment.
The United States does not even score in the top 25 in this category. The top 10 countries for material well being in retirement include: Norway, Iceland, Switzerland, Austria, Luxembourg, Czech Republic, Germany, Denmark, Sweden and South Korea.
3. Quality of Life: These are the factors that the study uses to determine quality of life for retirees: happiness, air quality, water and sanitation, biodiversity and habitat and environmental factors.
On these measures, the United States ranks 19th. The top 10 are: Denmark, Finland, Norway, Switzerland, Sweden, New Zealand, Iceland, Austria, Australia and Ireland.
4. Health: The health scores reflect physical wellness and the associated medical costs. This score is specifically based on: life expectancy, health expenditure per capita and non insured health expenditure.
The study notes that: “The higher a country’s health expenditure per person, the higher its life expectancy is expected to be.”
While the United States ranks relatively highly in the health category at 7th overall, we are a bit of an anomaly in that our life expectancy does not move in line with how much we spend on healthcare per person. The study mentions that: “Cyprus spends a quarter of what we spend on healthcare per person, yet their citizens can expect to live an average of two years longer than a typical person in the US.”
Is it Even Possible for a U.S. Citizen to Retire to One of the Top 5 Countries?
Here is the run down on each of the top 5 best places to be retired. (Hint: they might not be the best places to retire to from the United States – perhaps best if you were born there.)
1. Norway: Retiring to Norway, if it were possible , would be a huge shock – the long winter and endless darkness might make you rethink the plan. In fact, many Norwegians actually spend their retirement in Spain or Portugal where the cost of living is lower (and the elements are more forgiving).
According to LifeinNorway.net, “unlike some European countries, there is no specific retirement permit available. To live in Norway without working, you must either already have permanent residence, or have enough money to sustain yourself.”
2. Switzerland: Mike Coady, a financial and expatriate expert, lists 10 reasons why Switzerland makes an ideal retirement destination. Unfortunately, affordability is not one of those reasons.
3. Iceland: Retiring to Iceland would be yet another wintry and rather expensive proposition. Investopedia has a full run down of costs.
4. Sweden: Again, expensive, cold, and no access to state benefits.
5. New Zealand: With its natural beauty and boundless outdoor activities, wouldn’t almost everyone want to retire to New Zealand? Outdoor lovers would certainly love it, but you’ll have to be a relatively wealthy outdoor lover to qualify. According to Investopedia, you need to be 66, have almost $1 million and your own health insurance.
Can You Make Your Own Home Be One of the Best Places to Be Retired?
There is no place like home… and that can be true for retirement despite what this study might say.
The trick is to have adequate savings and financial resources and – if you haven’t saved enough – then be willing to make trade offs like working longer, downsizing, cutting expenses and getting creative in order to achieve financial security.
The NewRetirement retirement planner is the ideal tool for figuring out how to make retirement work for you (at home or abroad). This detailed system gives you almost complete control over all the factors that can contribute to your financial well being.
Start by entering basic information and get some initial feedback on where you stand. Then, add more detail and more accurately estimate for how much you need. Best of all, you can try an infinite number of scenarios and find a way to be retired on your own terms.
If you are interested in moving to one of the best places to be retired or elsewhere, you could try putting in the costs for retiring to your desired destination and compare that to retiring at home. For more ideas for where to retire, explore:
- 10 unexpected places to retire abroad
- How to find the best place for YOU to retire
- Best states for retirement
Take Control of Your Retirement: Use the NewRetirement planner to find your path to the future you want!
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