Switzerland, Iceland, and Norway stand out as the best countries for retirees, according to a French finance company called Natixis, which prepares a comprehensive survey of retirement conditions in 43 countries, called the Global Retirement Index (GRI). This year Scandinavia ranks on the Top 10 List of Best Countries for Retirement.
During his first TV debate with Hillary Clinton for the Democratic nomination, Sen. Bernie Sanders remarked: “We should look to countries like Denmark, Sweden and Norway and learn from what they have accomplished for their working people.” Clinton didn’t buy it. “We are not Denmark,” she replied.
Scandinavia ranks on the Top 10 List of Best Countries for Retirement
Of course, she was right. The rest of the world is not Scandinavia but is there something to learn from the Nordic countries? The Natixix index is based on four metrics measuring conditions for retirees. Most heavily weighted is financing of pensions, but to paint a more holistic picture the index is also based on the factors: material well-being, health and quality of life. The study is called the Global Retirement Index (GRI).
In the past few years, Norway, in particular, has made a few smart changes to its retirement system that have been a huge help to its residents and to its employers. Norway was No. 1 in the 2016 GRI, this year No. 3 after Switzerland and Iceland. On the whole, the Nordic countries seem swell places to retire.
Scandinavia does well on the 2018 GRI Index
Both Norway and its neighboring countries Iceland, Denmark, and Sweden, do well on the 2018 GRI index. Norway has a government-provided retirement pension along the lines of Social Security. But in 2011, the country did something pretty clever that went beyond it. Norway overhauled its private-sector pension system known as AFP to encourage older Norwegians to stay employed.
John Hailer, CEO of Natixis Asset Management explains that the old system for retirement has become outdated: “The demographic and economic development has made the old model unsustainable. The countries that are leading our index have succeeded in finding innovative ways to adapt to the new reality and are thereby laying a foundation for the rest of the world.”
If state finances were the only measure of how well future retirees could expect their golden years to play out, countries such as Singapore, Chile, South Korea, and Estonia, would be as high on the GRI as Scandinavia. But they are not. Much of this is due to the fact that retirees in the Nordic countries have a generally high quality of life.
Related: Norwegian Politics for Dummies
Norway is saving for the future
Only three countries across the Western world have reduced government debt (as a share of GDP) after the financial crisis ten years ago. These are Norway, Switzerland, and Israel.
Only Norway is saving for the future. Norway is in a unique situation with its vast pension fund, commonly called the “Oil Fund”. The oil fund is so big that it could have repaid Greece’s huge sovereign debt more than three times over.
In addition, Norwegian politicians have been very careful with the fund and retirement savings. Researchers who have studied this give former Norwegian prime minister and current NATO Secretary General Jens Stoltenberg a great deal of credit because he set the stage for the creation of a more sustainable pension system during his tenure that reduces the burden on young people of the future.
What is the Global Retirement Index?
The Global Retirement Index was compiled in May 2018 by Natixis Investment Managers and CoreData Research. The Index includes International Monetary Fund advanced economies, members of the Organization for Economic Co-operation and Development and the BRIC countries (Brazil, Russia, India and China). The researchers calculated a mean score in each category and combined the category scores for a final overall ranking of the 43 nations studied.
2018 Global Retirement Index
5. New Zealand
Scandinavia on Top 10 List of Best Countries for Retirement, written by Tor Kjolberg