The Netherlands named the best place to retire — here’s how other countries compare

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Retirement income systems vary in different countries, and the U.S. does not come out on top.

Klaus Vedfelt | Digitalvision | Getty Images

Long-awaited retirement plans might include traveling to far away countries, picking up new hobbies, spending time with family — and often a hope that money and support with things like health insurance won’t be a constant worry.

But all too often people at retirement age don’t have enough money to sustain themselves, let alone fulfil their wishes for old age. Ongoing economic concerns like the cost-of-living crisis, higher inflation and interest rates are only adding to this.

The additional concerns make one thing even more important: retirement income systems.

Those look significantly different in countries around the world, ranging from barely any provisions for retirees to being highly effective and thorough — which is ideal for retirees.

The Netherlands scored the highest in a recent ranking, followed by Iceland, Denmark and Israel. They have some of the strongest retirement systems, according to the Mercer CFA Institute Global Pension Index for 2023, which was published Tuesday.

All of them have “a first-class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity,” the research found and scored an “A” in the grading system.

Coming in below a number of other major economies, the U.S. scored a “C+,” placing it 22nd on the list.

Countries including Kazakhstan, Colombia, France and Spain were awarded the same grade. There are “some good features” in their retirement systems, but also “major risks” and “shortcomings” that could impact their efficacy and long-term sustainability unless they are addressed, the research said.

Some improvement suggestions for the U.S. system made in the report include introducing further restrictions to prevent people from accessing their pension funds before retirement and increasing the minimum pension for low-income pensioners.

“Introducing a requirement that part of the retirement benefit be taken as an income stream,” is another one, as well as improvements to how benefits play into retirement.

The analysis is based on over 50 factors, ranging from government support and benefits to local economic growth to regulation and communication. A wide variety of concerns is thereby addressed and considered, including whether retirees are well supported and taken care of, and whether the systems in question are built (and expected) to last.

A total of 47 different retirement systems were assessed in the report. They all operate in different circumstances and contexts, and some data can be difficult to compare, the report notes, so systems with only slightly different scores are often close to equally as good as one another.

The U.K. comes in ahead of the U.S. in 10th place with a “B” — meaning the system is set up well, but there is room for improvements — alongside Canada, New Zealand and Germany.

Many dream retirement destinations like Mexico, Indonesia and South Africa fall short of the U.S. with a “C” grade, only trailed by the D-valued countries Thailand, Turkey, India, the Philippines and Argentina.

Retirement systems in the latter have “major weaknesses,” the report said. Retiring there might therefore not be as dreamy as imagined after all.

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