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Brett Arends’s ROI: This is the best country for retirees

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America is a terrible place in which to retire.

So, at least, reports global asset manager Natixis. Apparently we rank 18th in its latest Global Retirement Index based on “retirement security,” not far ahead of Slovenia, Malta and Estonia. The top rankings mostly go to Scandinavian or Germanic countries along with Canada, Australia, New Zealand, Ireland, and South Korea and the Czech Republic.

Norway is No. 1.

It’s hard to know how much weight to apply to these rankings. Natixis says it calculates the numbers based on “18 performance indicators.” These range from the most obvious, such as life expectancy, noninsured healthcare expenditure, and the dependency ratio of old people to workers, to others such as “bank nonperforming loans” and “biodiversity and habitat.” 

In areas related to “material well-being,” says Natixis, the top country in the world is the Czech Republic, Malta is number 8, and America is so bad it doesn’t even crack the top 25.

No disrespect to the fine people in places like Norway, Iceland and Finland, but I think I might prefer to spend my golden years somewhere like the Florida Keys.

Make of this what you will.

Meanwhile, this report sparks some interesting questions.

Wouldn’t it be funny (funny peculiar, rather than funny ha-ha) if the world that doesn’t want immigrants were to start fighting for them instead?

As the study points out, over the next two decades most of the world’s rich countries will be facing a crisis as they run out of enough young workers to support all the older retirees.

Here in America, for example, we’ve got only 3.5 people of typical working age — meaning age 20 to 64 — for every senior citizen over 65. But by 2050 we’ll be down to 2.5 people of working age per senior citizen. And we’re in a much better situation than most other rich countries.

China will be down to a 2:1 ratio, and European countries such as France and Germany will have fewer than 2 people of regular working age per senior citizen. Japan, Spain and Italy, incredibly, will be nearing ratios of 1:1. In Japan, the first country to struggle with this demographic crisis, there will by 2050 only be about 5 working age people for every 4 retirees.

Try making that work.

Meanwhile China will have more senior citizens, about 370 million, than America currently has people.

As previously pointed out here, one of the simplest, easiest, lowest risk, highest reward policy options on Planet Earth is to open your doors to high-skilled immigration.

When you’re talking about high skilled immigration, you’re not even talking about problems like unskilled workers driving down entry-level wages for the resident population. Biotech Ph.D.s don’t get off the plane and start driving down other people’s wages. They accelerate growth.

Congress seems to have no interest whatsoever in doing any such thing. But then, why should it? These lawmakers aren’t the ones who are likely to see their retirement plans gutted when Uncle Sam runs out of money.

So why should they care? It’s probably better for their careers to play politics and demagogue the issue to their base instead.

Another thing that jumped out at me: Why is Norway such a standout in terms of retirement security? Here’s one thing that certainly helps: For decades they’ve been investing their giant national pension system in global stocks, like any normal fiduciary. Here in America Congress blows our Social Security dollars on dismal Treasury bonds. The returns, predictably, have been abysmal.

Congress could have changed that year ago. They could change it tomorrow.

But, again, why should they bother? As with legal immigration, so with the Social Security trust fund investment policy: If terrible decisions by Congress leave America in a retirement crisis, it’s probably not going to hurt… the 535 people in the House or the Senate.

Apparently, Social Security cuts, like taxes, are only for the little people.

Which explains why frozen Scandinavia may be a better place to retire even than America’s sunniest shores.

Learn how to shake up your financial routine at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. Join Carrie Schwab, president of the Charles Schwab Foundation.

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