After a lifetime of hard work, everyone hopes to have a relaxing, leisurely, and enjoyable retirement. Most countries have pension plans where retirees can enjoy their later years through comfortable pension arrangements. Some countries have signed retirement welfare agreements with the United States.
However, retirement income systems worldwide are facing unprecedented pressure. With declining birth rates, the demographics of most countries are undergoing significant changes. This development is having a major impact on pay-as-you-go pension arrangements that rely on the next generation of taxpayers to fund pensions for the previous generations. Many countries’ governments are facing tough choices such as reducing pension benefits or raising the retirement age due to insufficient funds.
In addition, inflation has eroded confidence in the long-term ability of pension plans to provide sufficient retirement benefits.
The Mercer CFA Global Pension Index, jointly published by Mercer and the CFA Institute, analyzed and ranked 47 pension systems worldwide, covering 64% of the global population.
The index for each country is calculated based on three main factors:
1. Adequacy: “How much can you receive (in pension benefits)?”
2. Sustainability: “Can the system remain effective?”
3. Integrity: “Is the system reliable?”
The Mercer report highlights the top three countries in retirement pension rankings. Each country “has a first-class and robust retirement income system, provides excellent benefits, is sustainable, and has a high level of integrity.”
– Country A:
Overall Index: 85.0
Adequacy: 85.6
Sustainability: 58.4
Integrity: 37.0
– Country B:
Overall Index: 84.8
Adequacy: 85.5
Sustainability: 83.8
Integrity: 85.0
– Country C:
Overall Index: 83.1
Adequacy: 82.5
Sustainability: 82.5
Integrity: 77.8
Before relocating abroad for retirement, it is necessary to consider one’s financial situation. Here are the qualification requirements for receiving retirement benefits in the Netherlands, Iceland, and Denmark according to gobankingrates:
In the Netherlands, according to the General Old Age Act (AOW) that took effect in 1957, all individuals living or working in the Netherlands between the ages of 15 and 65 qualify to receive national pension benefits after retirement.
Iceland currently has a retirement age of 67. The Icelandic pension system requires residing in Iceland for at least 3 years to enjoy senior benefits. You can retire early at 65 but with reduced benefits. Alternatively, you can choose to delay receiving benefits until age 70 for a higher amount.
For individuals not from Denmark but residing there, if they have lived in Denmark for at least 10 years, they may qualify for “social” benefits, with five of those years being before gaining eligibility.
Australia is rated B+ with a total score of 77.3. Canada is rated B with a total score of 70.2. The United States has a C+ rating with a total score of 63. Taiwan is rated C with a total score of 53.6, according to the pension index report.