Best countries to retire? U.S. doesn't make top 10, study says

If you’re looking for the best spot to spend your golden years, you may want to check out 17 countries other than the U.S., according to a new retirement ranking.

The United States placed No. 18 out of 44 countries for health, happiness and financial security of its retirees this year, falling two spots from 2018, according to the global retirement index from Natixis Investment Managers, an asset management firm.

The overall score for the U.S. was 72%. The top 10 countries for retirees scored 76% or higher.

The U.S. saw declines in three of the four categories that make up the index. It went from 10th place to 9th in finances in retirement; from 19th to 20th in quality of life; and from 26th place to 28th in material well-being. Its standing remained unchanged for the health of its retirees.

Natixis Investment Managers ranked the best countries for retirees based on four factors: finances in retirement, quality of life, health, and material well-being.

“What I would say is that [the U.S. is still] in the top 50% of countries,” said David Goodsell, executive director of the Natixis Center for Investor Insight. “We are a large country. We have different issues.”

Why the U.S. fell this year

One reason why the U.S. dropped in finances in retirement is the ratio of working adults to seniors, a key factor in funding Social Security and Medicare benefits.

Next year, there will be 3.5 working-age adults for each retirement-age adult, according to the report. By 2060, that shrinks to 2.5 working-age adults, potentially creating a funding shortage for Social Security and Medicare if current policy doesn’t change.

The decline in quality of life for U.S. retirees is simply due to a decrease in happiness. While U.S. environmental factors improved, this wasn’t enough to offset the fact that fewer retirees are content with their overall lives.

Intergenerational projects set up in a kindergarten and Nursery School, Switzerland, volunteer retirees take part in the day's organization by participating in the activities. (Photo: BSIP/Universal Images Group via Getty Images)

Last, the increasing wealth gap between higher-income and lower-income earners is the main reason for the decline in well-being in the U.S. This year alone, the U.S. received the 8th worst score overall for income inequality.

Top countries for retirees

All the countries in the top 10 shared high scores for both the health and quality of life. They all received at least a score of 83% and 81%, respectively, in those categories.

This year, Iceland unseated Switzerland for the top spot, largely because of its advantage in material well-being. Denmark and Canada both moved up one spot versus last year, while Sweden and Australia slipped two and three spots, respectively.

Luxembourg earned a place in the top 10 this year, edging out the Netherlands for the last spot. The country outranked the Netherlands in all categories except material well-being, but its largest advantage was in health.

When asked about the fluidity of the lists, especially the U.S. ranking, Goodsell said changes take time. “What I noticed [is] these are not quick-moving trends,” he said. “It can take years to move up on the list.”

Here are the top 10. Percentages were rounded, so it appears there are ties.

  1. Iceland - 83%

  2. Switzerland - 83%

  3. Norway - 80%

  4. Ireland - 78%

  5. New Zealand - 78%

  6. Sweden - 77%

  7. Denmark - 77%

  8. Canada - 77%

  9. Australia - 77%

  10. Luxembourg - 76%

The study considered 18 total factors to create a final composite score for each country. In its seventh year, the study is designed to spark discussion about societal retirement risks among policymakers, employers, and individuals.

Dhara is a writer for Yahoo Finance. Follow her on Twitter @dsinghx.

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