Mercer releases a widely watched yearly survey that compares the retirement income systems of 47 countries around the globe, and typically European countries fare best. In 2021, Blacktower, a wealth management firm, published a report that analyzed a greater number of European nations and ranked Belarus as the lowest based on several variables.
Doing careful research and planning when considering a move to another country for retirement is essential, including being cognizant of social security, healthcare, and financial parameters. Every year Mercer releases a widely-followed global survey that assesses 47 different retirement income systems, with European nations generally proving to be the most advantageous. In 2021-23, three countries, Iceland, the Netherlands, and Denmark, have held the top three spots in Mercer CFA Institute's global index, all having obtained an average of above 81.8. Eimear Walsh, Mercer's Head of Investments and Wealth, remarked that they are "large industry funds with defined contributions from workers and employers, and mandatory or quasi-mandatory schemes, which benefit from good economies of scale in contrast to the U.K.'s fragmented occupational pensions". This year, the Netherlands ranks first in the index via its ample benefits, strong asset base, and sound regulation. Meanwhile, certain European nations such as Spain, Italy and Croatia have demonstrated certain deficits. The Mercer index is composed of three components: adequacy, sustainability, and integrity.
The primary purpose of any pension system should be to supply retirees with sufficient income, functioning as a form of safety net. Governments have a significant responsibility to inspire average-wage earners to plan for their post-career years. In addition, the design of the payment plan is critical to the success of the system, according to Mercer, including whether it allows people to increase their benefits if they leave the workforce for reasons such as childcare or illness. Portugal had the highest rating in Europe on this metric, with a score of 86.7, due to its earnings-based public pension system. Close behind in second place was the Netherlands with 85.6. Both of these plans also provide a minimum pension rate for even those on the lowest incomes. At the other end of the scale, Poland had the lowest score in Europe, coming in 31st globally at 59.8. Portugal was also named the top European nation for retirement by relocation firm Moving to Spain in a June report. Factors considered included visas, beaches, security and home prices. In contrast, a 2021 list from wealth management company Blacktower evaluated a much wider range of European countries, with Belarus being given the lowest rating based on several key criteria.
Pension plans administered by companies in the private sector are a significant factor in the stability of a nation's retirement infrastructure. The Mercer index evaluates the value provided to members of private pension plans and the public sentiment towards them; Finland achieved the highest grade in the integrity bracket, with a 90.9 rating in 2023. Belgium followed with 88.2 and the Netherlands was in third spot with a tally of 87.7. France had the least impressive score in Europe, with 54.4 points; the U.S. also scored below the global mean, receiving 59.5.
Finland is considered a desirable place to retire due to its superior quality of life, and has held the top position in Natixis' "quality of life" ranking for 5 years straight. Its high score is based on factors such as happiness, air quality, water and sanitation, and biodiversity. Norway is the overall leader in Natixis' Index for 2023, with an overall score of 83%, while Switzerland takes first place in the "finances in retirement" category.
Mercer states that the sustainable nature of a country's retirement system is reliant upon two factors: the economic growth of the nation in the long term, which will have an impact on the amount of people in the workforce as well as how much wealth is saved for retirement purposes; and the amount of debt and public funds allocated towards pensions.
Iceland has Europe's most sustainable system as per the rating of 83.8, closely trailed by Denmark and the Netherlands at 82.5 and 82.4 respectively. With the lowest score of 23.7, Italy is followed by Spain at 28.5. Mercer's Walsh pointed out that the index doesn't consider some subjective factors which could make countries like Italy and Spain preferred locations for retirement. She added that for many people, the tax system, climate, and culture also play a major role in setting up a place to live as it is an important factor for being content and happy.
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