Those international “best places to retire” surveys typically point to warm, low-cost countries in Central and South America. But, in many ways, beautiful northern places like Norway, Denmark, Finland and Iceland may be even better.
That’s my conclusion after poring over the 2024 World Happiness Report, the Natixis 2023 Global Retirement Index and the Mercer CFA Institute Global Pension Index 2023, as well as speaking to their creators.
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And after vacationing in Norway where I talked with an old friend who is a semi-retired U.S. expat married to a retired Norwegian, I came away even more persuaded that you might want to consider the Nordic region if you’re thinking about retiring abroad.
Really.
‘I’m happy to pay my taxes’
“To me, Norway is a magical place,” my pal Nina Berglund, a digital editor and former Californian, said. “We have good pensions and I feel very well taken care of here. But we also have contributed a lot [in taxes] of course.”
Added her husband Morten Most, a retired journalist: “You often hear Norwegians say, ‘I’m happy to pay my taxes,’ and to a certain extent that is true because of the expectation that your taxes will be worth it.”
Those steep Norwegian sales taxes, an annual wealth tax of 1.1% on assets over $160,000 and the national Norwegian Oil Fund help pay for government-provided retirement pensions plus nearly free health care, long-term care and college educations. Employers must provide pensions, too.
In Norway, Berglund said, if you need home care or a nursing home, “everything is covered.” The copay for a doctor’s appointment is around $25, she noted. Hospital stays, X-rays, MRIs and CAT scans are mostly covered by government health care.
Retirees living in Norway only pay taxes on income they earn there (22% to 39%). There’s no inheritance tax and property taxes are low by U.S. standards.
“I don’t feel stressed at all,” said Most. “Time flies very fast. I have a good retirement.”
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High rankings for retirement and happiness among people 60+
Indeed, Norway ranked No. 1 in Natixis’ Global Retirement Index for the third straight year. That index measures retirement security by looking at health, finances in retirement, quality of life and material wellbeing.
Norway was also the third happiest country for people 60 and older in the World Happiness Report, based on residents’ assessments of their lives. Denmark topped the World Happiness Report and the U.S. ranked No. 10.
Along with nearby Sweden, Norway scored a B in the Global Pension Index, calculated by crunching data on the adequacy, sustainability and integrity of each nation’s retirement income system. Denmark nailed an A.
Some Nordic countries are remarkably safe, too. In Numbeo’s 2024 Global Safety Index, Iceland ranked 18, Denmark 20, Finland 23, Norway 39; the United States is 88.
What makes the countries score so well
Why do Scandinavian countries of Norway, Denmark and Sweden plus Nordic ones like Finland and Iceland consistently show up so well in these types of surveys?
Countries at the top of the World Happiness rankings, said John Helliwell, a lead researcher for that study, are well-off and people have “good connections, high trust and high caring for each other.”
“I tend to think that it’s the holistic view of things they have,” said David Goodsell, executive director of the global research program, Natixis Center for Investor Insight, which publishes the Global Retirement Index. “If you’re not worried about your healthcare or about wanting to [afford to] go back to school in retirement,” he added, “those things are going to impact how you feel.”
David Knox, who heads up Mercer’s Global Pension Index, cites what he calls the “social compact” of these countries between their residents as well as between the residents and their governments.
“Each generation expects to support, and then receive from, the next generation,” he said. “It’s a less individualistic society” than in the United States, Knox added.
Two other factors Goodsell cited: stable economies and small populations — combined, Nordic countries have fewer people than Canada.
When setting retirement policies, said Knox, “I think it’s easier for a relatively smaller country to say: ‘This is what we are going to do.’”
Employers tend to be paternalistic in Nordic countries, too, which helps in retirement. “In Denmark, more than 80% of the working-age population has a pension account,” said Knox. “That’s much higher than in America.”
Good retirement systems, happy residents
Knox isn’t surprised that many Scandinavian and Nordic countries score so well in both the World Happiness Report and his Global Pension Index.
As people approach retirement, he said, if their government is under pressure financially, “they may worry, ‘Will they cut the state pension and can I afford to retire?’ But if I’m in a system like Norway, which has the confidence of the Oil Fund, there’s an element of ‘I’m happy I’m going to retire here’ and that there will be support from the government, whether it’s in pensions or health care or whatever.”
Absent from ‘best places to retire’ rankings
Interestingly, the annual Best Places to Retire surveys from International Living and Live and Invest Overseas don’t even include Nordic countries in their rankings. I asked their creators why.
Donal Lucey, head of digital content at International Living, cited the cost of living which, he said, “can be prohibitive for retirees.”
It’s true that gasoline and groceries can be high in that part of the world, but rents are significantly lower in Oslo, Copenhagen and Stockholm than New York City, according to Numbeo.
Lucey called visa and residency requirements in Nordic countries “stringent,” since these nations don’t have retirement visa programs like in Portugal and Mexico.
“U.S. retirees would need to navigate complex immigration laws,” said Lucey. “And without significant financial means, securing long-term residency can be difficult,” he said. In Norway, it takes three years to become a resident.
Live and Invest Overseas publisher Kathleen Peddicord said: “My quick, maybe flippant, response is that we don’t talk about that region because the weather is awful and the cost of everything is very high.”
“As a retiree shopping the world map for options for where to live better on whatever budget you’ve got,” she added, “you’ve got many better choices than those cold, dark, overpriced countries in Northern Europe that don’t really want you there anyway.”
That’s something of an overstatement.
Cold? Often, but not in the summer. “I love the change of seasons,” said Berglund. “We’re still very active. We go skiing.” But, she conceded, “winter for many elderly, and a lot of Norwegians, is very hard.”
Dark? Yes, in some parts of the year, but not others.
Don’t want you there? That wasn’t my experience as a tourist, nor what I heard from my expat friend and her husband.
It helps, however, to live by what the Danish call “hygge” — enjoying the simple pleasures in life.
Advice for pre-retirees
World Happiness Report researcher Halliwell said that instead of looking for a great place in the world to retire, visit some of the happiest countries to see what explains that feeling and then try to emulate it after returning home.
“Apply the Nordic lessons where you already live,” he said. “It shouldn’t be about where you can get the most bang for your buck.”
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Source: finance.yahoo.com