Retiring Abroad: Top 3 Countries for Retirement Pensions

Retirement should be a time of rest, relaxation, and entertainment. In some countries, you can retire well via a comfortable pension scheme. Certain countries even have retirement benefits agreements with the United States.

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The Mercer CFA Institute Global Pension Index 2023 provided an analysis and ranking of 47 pension systems around the world. Each country’s index is calculated via three main factors:

• Adequacy: “How much do you get?”

• Sustainability: “Can the system keep delivering?”

• Integrity: “Can the system be trusted?”

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Top 3 Countries for Retirement Pensions

Mercer’s report highlighted the top three countries for retirement pensions. Each country has a ranking that signifies “a first-class and robust retirement income system that delivers good benefits, is sustainable and has a high level of integrity.”

Netherlands (No. 1 Out of 47)

• Total Index: 85.0

• Rating: A

• Adequacy: 85.6

• Sustainability: 58.4

• Integrity: 37.0

Iceland (No. 2 Out of 47)

• Total Index: 84.8

• Rating: A

• Adequacy: 85.5

• Sustainability: 83.8

• Integrity: 85.0

Denmark (No. 3 Out of 47)

• Total Index: 83.1

• Rating: A

• Adequacy: 82.5

• Sustainability: 82.5

• Integrity: 77.8

How To Qualify For Foreign Pensions

You’ll want to consider your finances before making a retirement move abroad. Here’s how to qualify for retirement pensions in the top three countries:

• Netherlands: According to I Am Expat, under Netherand’s General Old Age Act or Algemene Ouderdomswet (AOW), which came into effect in 1957, all people who have lived or worked in the Netherlands between the ages of 15 and 65 are entitled to receive the state pension.

• Iceland: According to the Social Security Administration, the current retirement age in Iceland is age 67. The Icelandic pension system requires a minimum of 3 years of residency in Iceland for entitlement to an old-age benefit. You can retire early at age 65 with a reduced benefit amount. You may also elect to defer receipt of your benefit until age 70, at which point you’ll be eligible for a higher benefit amount. It’s worth considering that Iceland pays a flat rate benefit depending on the number of years of residency in Iceland, with 40 years of residency yielding the maximum benefit amount.

• Denmark: According to the Social Security Administration, people who are not Danish nationals, and still reside in Denmark, may qualify for “social” benefits if they have resided in Denmark for at least 10 years. Five of those years must be immediately before entitlement.

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