Australians are retiring overseas in increasing numbers, but are they turning their backs on one of the best countries in the world to retire in?
Yes, according to the 2021 Best Countries To Retire report from Retirement Living. But we’re not No. 1.
The study measured countries across four categories: cost of living (the average cost of housing, food and other daily expenses; purchasing power (country’s average income against cost of living); quality of life (level of political and economic stability, legal practices, civil rights, health services and medical services), and average local temperature.
Each year, an estimated 11,000 Australians choose to retire overseas. And the ‘international retiree’ is now seen by many countries as a lucrative way to boost a flagging economy.
Read: What happens when you withdraw your super from overseas?
It’s no secret that living costs in Australia are relatively high, and predicted to get higher, so it can make economic sense to relocate to a country with a cheaper lifestyle, especially if you’re retiring with a smaller nest egg.
But if you could choose where to retire, where would you go? The Retirement Living analysis has done some of the hard work for you. This is the top 10.
1. Portugal
Possibly not the first country you’d think of for retirement, Portugal consistently tops lists of the best countries to retire to. One of the key reasons is its retirement tax laws for foreigners, introduced to attract retirees from around the world to boost the economy.
With a cost of living score of 74.4 and purchasing power of 44.9, Portugal offers a cost-effective way to retire on the continent. Portugal also has one of the warmest climates in Europe.
2. Netherlands
It may have a fairly high cost of living score (97.4), with a purchasing power on the lower end (82.6), but strong public services, especially in healthcare, make the Netherlands the second best country to retire in.
3. Australia
That’s right – we’re not No. 1 but still in a respectable third position. What pushes us down the order is the eye-watering cost of living score (109.2). Thankfully, wages here are also high, resulting in a purchasing power score of 74.6. And we have one of the highest quality of life scores globally at 77.
Read: Trends that support a positive retirement outlook
4. France
“From the French Alps to castles, Paris to small villages, vineyards to fantastic cuisine, retiring in France can be a dream come true,” Retirement Living says.
France’s cost of living is at the higher end at 95.4 and purchasing power is only average at 67.3. But it ranks highly due to the country’s universal healthcare system and relatively low real estate prices.
5. Spain
Spain has long been a favourite retirement destination for UK seniors, but it’s fast become popular with retirees from across the globe. Spain has more than 4980km of coastline and coastal temperatures can reach over 35 degrees in the summer.
At 79.9, cost of living in Spain is low compared to Australia, though wages make the purchasing power only average (57.6). The country ranks well for healthcare and safety, and has a high quality of life score (71).
6. Belgium
Belgium’s quality of life score includes good marks for healthcare, safety and civil rights. The country’s cooler climate (average temperature around 11 degrees) and high cost of living score (96.3) stop it being higher on the list.
7. Italy
A big percentage of Australians can trace their family history back to Italy. Retiring to Italy is often a choice driven by family ties, but there are good economic reasons to retire there as well. Cost of living in Italy is high (96.3), but not as high as Australia. The healthcare system is affordable. Users pay a small annual fee to cover medication, surgery and hospital stays.
8. Japan
Japan could be considered a surprising inclusion in the top 10. It may have a high cost of living (106.9), but it’s still lower than in Australia and rent and real estate prices are significantly lower than here. But Japan is not for sun-seekers. The annual average temperature is just a chilly eight degrees. The nation of islands is also susceptible to natural disasters such as earthquakes and monsoons.
9. Luxembourg
The only country on this list with a cost of living score higher than Australia’s (113.7), Luxembourg has a much higher purchasing power score (98.6), reflecting the country’s wealth.
“Luxembourg is surrounded by Germany, France and Belgium, and foreigners make up 48 per cent of the population. Germans, Italians, Portuguese, Scandinavians and British people call Luxembourg home, lending their customs and languages to a rich and diverse heritage.” says Retirement Living.
10. Germany
Rounding out the top 10 is Germany. Scoring highly on quality of life and with a cost of living not too expensive (especially when compared with Australia), Germany is ideal for those who prefer cooler temperatures, lush forests and cultural sites to sandy beaches.
Would you consider retiring overseas? Do you think you’d be able to achieve a better quality of life by staying here or moving? Let us know in the comments section below.
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