Editor's Note: This story originally appeared on NewRetirement.
So, which country’s citizens enjoy the best retirement?
According to the 2021 Global Retirement Index Report from Natixis Investment Managers, the citizens from these 10 nations rank highest:
- Iceland
- Switzerland
- Norway
- Ireland
- Netherlands
- New Zealand
- Australia
- Germany
- Denmark
- Canada
And the United States? The U.S. moved back down one spot, and now ranks as the 17th-best place to be retired. (The country was ranked 16th in 2020 and 18th in 2019.)
Keep reading to learn more about how these rankings are calculated, where the U.S. stands on key factors and whether you can retire to one of the top five countries of the top 10 listed above.
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 four categories:
Will they be able to generate the income they need to sustain themselves through retirement?
Can they be confident the financial systems supporting their retirement funding will be resilient through short-term disruptions?
Do they have access to the health care needed to address the physical challenges of aging?
What will their quality of life be like during this vulnerable point of life?
1. Finances in Retirement
This category addresses old-age dependency, bank nonperforming 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.”
How does the United States rank? Due to government indebtedness, the U.S. is holding at No. 11 on this measure behind Singapore, Switzerland, New Zealand, Australia, South Korea, Chile, Estonia, Ireland, Iceland, and Canada.
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.
How does the United States rank? The United States does not even score in the top 25 in this category (coming in at 26th) largely because of income inequality.
The top 10 countries for material well-being in retirement include: Iceland, Norway, Netherlands, Czech Republic, Germany, Slovenia, Malta, Denmark, Austria, and Ireland.
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.
How does the United States rank? On these measures, the United States ranks 21st. The country’s rank fell in 2021 due to lower scores in both the happiness and environmental factors indicators. The top 10 are: Finland, Norway, Denmark, Switzerland, Sweden, Iceland, United Kingdom, Austria, New Zealand, and Germany.
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 noninsured health expenditure.
The study notes that “The higher a country’s health expenditure per person, the higher its life expectancy is expected to be.”
How does the United States rank? The United States falls one spot to 17th in the health category. The dip is surely related to the dip in life expectancy due to COVID-19 deaths. Life expectancy decreased one full year in 2020.
Generally, the United States does not score particularly well in this category because our life expectancy does not move in line with how much we spend on health care per person.
The U.S. finishes first for health expenditure per capita (we spend the most on health care) but only 30th for life expectancy.
Can a U.S. Citizen Retire to One of the Top 5 Countries?
Here is the rundown of what it takes to retire to one of the top five best countries to be retired.
Warning: These are not necessarily the easiest places to retire to from the United States — perhaps it is best if you were born there. (Go check out the best places to retire in the world if you are an American looking to retire abroad.)
1. Iceland
Retiring to Iceland would be a wintry, expensive, and difficult proposition for a U.S. citizen. It is one of the most expensive countries in the world.
EEA/EFTA citizens (from the 27 EU member states and three EFTA states of Iceland, Liechtenstein, and Norway) have a relatively easy time, but Americans will face a lot of bureaucracy and, as part of the application process, you have to prove that you can support yourself while in Iceland. As of 2019, if you don’t have an employment contract, you must have at least 189.875 ISK (about $1,500) per month in your bank account. Learn more about how to move to Iceland.
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. Norway
Retiring to Norway, if it were possible, would be a huge shock — the long winter and its seemingly 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 weather is 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.”
4. Ireland
Ireland holds a special place in the heart of many Americans. And, with rolling green hills, a temperate climate, tremendous natural beauty, and friendly, outgoing people, it could be a retirement delight.
First the good news: A U.S. citizen can become a citizen of Ireland if you, your parents, or grandparents were born there.
The bad news? Everyone else must be able to prove that they won’t be a burden to the state and prove at least $55,000 in annual income. You won’t be allowed to work, must renew your permission every year, and follow other recently updated rules that actually make it quite difficult for a U.S. citizen to retire to Ireland.
5. Netherlands
Without European residency, retirement in the Netherlands may be challenging.
Besides, with a cost of living that is higher than in the United States, it may not be the best place to retire. Although, rents are lower and health insurance is affordable.
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 — to be willing to make trade-offs like working longer, downsizing, cutting expenses, and getting creative in order to achieve financial security.
If you are interested in moving to one of the best places to be retired or elsewhere, you could try figuring the cost of retiring to your desired destination and compare that with retiring at home. For more ideas for where to retire, explore:
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