Australia is one of the world’s best places to retire, or is it?

Australia is ranked in the top third of countries considered the best countries to retire.

Is Australia the best place to retire?

Happiness in retirement isn’t the same for everyone. Tom Carmony/Flickr, CC BY-NC-NDRafal Chomik, UNSW and David Rodgers, UNSW

Australia is ranked in the top third of countries in almost all indices measuring the best countries to retire, according to our analysis of nine separate ageing and retirement indices.

The problem is, experts contriving such indices can’t agree about which ingredients should be included and which are most important.

The flaw of averages
While composite ageing indices provide us with what appear as simple comparisons, the underlying methodologies are complex, prone to judgement, and can be tweaked to obtain certain results.

Using indicators that aggregate outcomes for the older population within a country also ignores differences between people within this population. Sub-indices by gender and more granular age-groups do exist, but one improvement could include an inequality adjustment based on outcomes by socioeconomic status or income.

What about just asking people about their life? Studies that compare differences in people’s own evaluations of life across countries show these are substantially explained by social and economic differences across countries. And when comparing individuals in high-income countries such as Australia and Britain, good physical and mental health appear most correlated with life satisfaction, while in middle-income countries like Indonesia, income is more important.

But that doesn’t differentiate by age. When the OECD asked older people across rich countries what mattered to them, they said that “health” and “environment” were most important while “civic engagement”, “community” and “income” domains were less so. By contrast, younger groups attributed less weight to “environment” and more to “income”.

Such indices usually involve scoring a country in several categories and combining these into a composite score and ranking. Done well, these can reveal how life in one location is better than another and in which categories it is lagging.

So what do existing indices suggest is important for older people’s well-being? And which countries come out on top?

Ingredients for a good old age
The ingredients used in an overall index differ, ranging from the employment rates of older people in each country, to their political participation, income, levels of exercise, and life expectancy.

These indicators and weights are often chosen subjectively by experts constructing each index. Some comparisons focus on current standards of living and comprise social, environmental, health, and economic indicators. These are probably more immediately relevant to people.

By contrast, indices that aim to measure the likely future for older people mostly comprise financial indicators and those that relate to retirement income system design, demography, and economic conditions. These are probably of greater concern for those thinking ahead about the impacts of population ageing.

Where to retire?
Despite the flaws with such comparisons, few people can help themselves. So how does your country rank?

European countries – particularly Nordic ones – are consistently highly ranked across ageing indices (see figure below). Such results reflect their high health outcomes, high incomes, generous social welfare, and comparatively well-designed retirement income systems. These are also countries that top the subjective happiness rankings.

Lower and middle-income countries receive lower rankings from the current well-being indices in which they feature. India and China, where there is low public provision for retirement, occupy high rankings among indices that emphasise fiscal sustainability over the quality of life of older people.

Australia is ranked in the top third of countries in almost all indices. It ranks particularly highly in the Melbourne Mercer Global Pension Index, largely due to the design of its retirement income system.

The ConversationFor what it’s worth, one could take an index of these indices to summarise. Such an index, call it the CEPAR meta-index of ageing, indeed shows Nordic countries taking the top three places, followed by Australia and the US, with the UK coming somewhere in the middle of 25 countries – apparently well ahead of places like France and Italy. Something to ponder when contemplating the good life in old age.

Rafal Chomik, Senior Research Fellow, ARC Centre of Excellence in Population Ageing Research (CEPAR), UNSW and David Rodgers, PhD Student in Economics, UNSW

This article was originally published on The Conversation. Read the original article.





    COMMENTS

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    Sundays
    3rd Apr 2018
    12:20pm
    What about the weather? Those Nordic countries can become very bleak in the long, cold Winter. No thanks!
    Puglet
    3rd Apr 2018
    12:37pm
    I’ve just returned from a holiday in Norway and Finland - midwinter is sooooo beautiful but sooooo cold (-30 degrees in some places). There seems to be very little poverty and there is a universal pension. I don’t think I could bear not seeing the sun for months, no wonder the rate of alcoholism is so high as is suicide. Of course these articles don’t state the incredibly high tax rates needed to support all the amazing initiatives including ‘free’ beautiful aged care.
    KSS
    3rd Apr 2018
    12:33pm
    Seems to me the outcome of these indices don't reflect the opinion of the writer. Clearly Australia is not as bad as many would have us believe and the pensioners lot is not that bad!
    Cowboy Jim
    3rd Apr 2018
    1:29pm
    Too cold for me and too expensive as well, know the countries well enough being a native to Switzerland. The taxes are horrific, especially for booze and tobacco. Sure the cradle-to-grave socialism is alive and well but the fun is missing. Well, I made up my mind long ago -
    I shall stay here, paid my taxes here for 50 years and what I get back in my old age suits me.
    Lyn
    3rd Apr 2018
    3:11pm
    Well said Cowboy Jim.

    3rd Apr 2018
    3:46pm
    according to the author, you can;t believe the surveys because they are manipulated

    I agree. Australia and the US should be top of the table
    .

    3rd Apr 2018
    4:28pm
    We wouldn't want to live anywhere else. We have travelled extensively over many years and have seen a lot of the world and we are always glad to come home. In saying that, I should qualify that we live on the coastal section where most Australians live and we have no desire to live in small inland towns where the people are without peer but the services leave a bit to be desired. We have also travelled to almost every part of Australia and have enjoyed every minute of those trips. I suppose it all becomes a most personal choice, dependent on a lot of things but we are very happy to be Australians living in Australia.
    David
    4th Apr 2018
    12:20pm
    I agree with the general sentiments expressed here that Australia is one of the best places to live and also that our pension system is pretty good when compared with the rest of the world. The only other country I would consider moving to (if my wife would agree) would be New Zealand.
    Anonymous
    7th Apr 2018
    12:53pm
    I agree entirely with every word David. NZ would be the only other country I would go to.
    As we get older we need good medical services. The countries to the north maybe ok but health care...I dont know.
    David
    8th Apr 2018
    9:30pm
    Agree Radish.
    Another advantage of living in NZ is that there is a Reciprocal Health Care Agreement so our Medicare card will cover some of the medical expenses in public hospitals there.
    Also if you move there and become a NZ resident (I believe it takes 10 years to qualify) then you are entitled to the NZ pension, which is not means tested. It's a great benefit for self-funded retirees like me who don't qualify for the pension in Australia.
    Drewbie
    4th Apr 2018
    7:04pm
    Unbeknownst to many who comment on articles such as this one, is that when it comes to stretching the " retirement income stream " to adequately cover living costs & leave some left over for modest, positive investing & eradicate the huge stress burden of making ends meet . . . Australia just doesn't cut it from a purely financial sense regarding
    ( quality of lifestyle ).

    Sure enough, Australia is a stable, generally safe Country to live in, but its inherent cost of living is often outrageously expensive for what you get in return. There are Countries to our North & elsewhere that offer "significant & safe " lifestyle advantages for empty-nesters, grey nomads, etc. These Countries " do have " medical professionals across the board who have trained, lived & worked in Australia for considerable years & then returned to their home of birth to offer/provide high quality services that are on par with those provided here; but at a price that is peanuts in comparison, plus waiting times are in the minutes, compared to hours in Aussie emergency dept's.

    True enough; you must be diligent in your lengthy research before taking the plunge. But the time doing so & a tentative approach will reap satisfying results in lifestyle, new friends, a friendly welcome to expats; & the best thing ? ? ? Our AUD will stretch up to 10 x more what it would in an Australian restaurant, pub or tourist attraction.
    Franky
    4th Apr 2018
    8:36pm
    I agree, having friends retired in Asia (Bali, Vietnam, Malaysia) and seeing their lifestyle. There is also a good magazine called International Living, where Australia doesn't rate at all. Instead countries in Central and South America seem to be on top of the list when it comes to desirability for retirement living, with a few in Asia.
    Climate in those countries is a major advantage as is also cost of living.
    GeorgeM
    5th Apr 2018
    8:54pm
    These indices, as with all statistics, do not tell the real truth just result in some researchers making some money.

    Australia is a good place to live due to it's lifestyle, gun controls, climate, people, environment, etc. However, not so good if you need a pension (unlike all advanced countries who have Universal Pension), or if you need Private Health Insurance cover. So, it is a personal choice - some may prefer NZ. Scandinavian countries, Canada, etc,are too cold.