Natixis puts out a Global Retirement Index every year (I found it, as usual, thanks to BankersOnWheels). It’s one of those research pieces that I wish had always existed, especially for someone like me who is keen to optimise and…calls home the place where my family is.
There are some pros and cons: let’s dig in.
The survey results are mostly vibes
69% of respondents say inflation eroded their retirement savings. That’s a real finding. But a lot of the other survey data is just people being people: we all think our situation is worse than it actually is, and we all feel entitled to a retirement that looks like a cruise ship commercial.
Politicians spent decades promising voters a comfortable retirement funded by someone else. People believed them. Now the bill is coming due and everyone’s surprised. This is a financial planning problem as much as it is a broken promises problem.
The first element that emerges is how surveys might be useless if questions are not asked in the right way. Take the first fear: “enjoy” carries a lot of weight. Knowing that no one is ever happy about their own circumstances at work, it is no surprise that they would feel unhappy about their prospects of future enjoyment.
A lot might be linked to the idea that we feel entitled not only to have a paid retirement, but also to have fun while at it.
The five big retirement fears, translated
The survey surfaces five fears. Here’s what they actually mean:
- Not enough money to enjoy retirement — Probably ticked by people who saved close to nothing. The data backs this up: most retirees who put aside a fair pot actually spend far less than they could.
- Government benefits getting cut — Not a fear. A forecast. Especially in places like Italy, where the math simply doesn’t work.
- Inflation is killing my dreams of retirement — The most legitimate fear on the list. And the one people are worst prepared for. And if you ask me, neither are their financial planners.
- Can’t save enough today — The other side of #3. When you’re living paycheck to paycheck, long-term saving is a luxury.
- Healthcare costs — Probably most feared by the people who actually saved the most. Funny how that works.
#2, #3 and #4 are all linked: politicians are creating more debt today (instead of fixing the issue by ripping the band-aid and cutting benefits) to fulfil their own broken promises. The only way to get out of that debt is to inflate it away, which exacerbates all the other problems, in a neat vicious circle.
And #5 is just a subset of #2, at least in those countries where taxes are supposed to finance universal healthcare.
The inflation problem is worse than most people realize
Bonds and cash feel safe. They are not safe. Not when inflation is eating your purchasing power in the three categories that matter most in retirement: food, housing, and healthcare. None of those are optional expenses.
(“housing is not a problem because I paid the mortgage in full“. My parents should replace all the windows in their place and won’t…because it is bloody expensive. But then their heating bill goes through the roof. Oh well, they can enjoy their retirement by simply wearing three jumpers in winter.)
Inflation as the game’s final boss is definitely a positive realisation. Unfortunately, I do not see many people tackling this issue in an effective manner. Bonds, cash, and low-risk investments represent a significant, if not core, element of the portfolio of many. The fear of today, volatility, is fuelling the fear of tomorrow, inflation erosion.
Hopefully, financial advisors will put more stress on the importance of achieving real, above-inflation cash flows during retirement, and consequently put to rest the idea that bonds equal safety.
The bigger problem is that retirement math is impossible to do cleanly. You have two massive unknowns, future inflation and how long you’ll live, and no reliable way to hedge both while “enjoying” your savings along the way. This is why “Die With Zero” sounds great in a book and falls apart in real life. Nobody wants to run out of money. So they underspend, for a reason. With those two unknowns, defining a proper “utility” out of your savings is impossible. A big part of the frustration stems from this simple fact.
A podcast listener recently asked me and my co-hosts a simple question: what do we think about long-term care insurance?
The short answer is: there isn’t one. Not really.
Long-term care is one of those risks that is too probable to be cheaply insured. The premiums reflect that reality. So the quiet, uncomfortable answer is self-insurance, which is just a polished way of saying: save more money.
If you want to give money to your kids when they actually need it, in their 30s and not as an inheritance in their 50s, you need something close to a ‘contract’. Help them now, with the understanding that they step in if the long-term care bills spiral. It’s not elegant. But neither is the alternative.
There is no optimisation here. Only trade-offs.
And this brings me to the point that I was making earlier. These two risks, longevity and long-term care, mean that you have to abandon the idea of de-risking the portfolio during retirement. The problem isn’t being too aggressive near retirement. In fact, depending on how your portfolio is structured, some conservatism around the sequence-of-returns risk can make sense. The real problem is being too conservative throughout, before retirement and after it, and slowly, quietly, running out of the runway.
Retirement isn’t always a choice
This part deserves its own billboard:
“The combination of personal and family challenges or a late career layoff (whether it’s the result of AI or not) can disrupt savings plans at a critical time when individuals are in peak earnings years and topping off retirement accounts.“
“I’m saving too much” is a misframing of reality. Saving is just the other side of spending. They’re the same coin, flipped. And some spending is obviously worth it. Paying someone to do your household chores while your kids are young and still actually want to spend time with you? That’s not extravagance. Your time is worth more than the cleaner’s hourly rate. Do the maths.
But flying business class instead of economy is a different kind of trade-off. Not just because of the cost itself, though that compounds quietly over the years, but because of what it does to your baseline. You get used to a certain level of comfort. And when that comfort disappears, the fall feels harder than it should. You don’t just lose the seat. You lose the version of yourself that expected it.
Here’s the real case for saving aggressively once your income reaches a certain level. It’s not about avoiding becoming insufferable, though that’s a nice side effect. It’s about recognising that the higher you climb, the easier it is to lose that altitude permanently.
I’m not saying never fly business if you can afford it. I’m saying price it correctly. Not in dollars. In years of future freedom.
Because past a certain point, the opportunity cost of lifestyle creep starts to outweigh the risk of it all disappearing. And sometimes the risk has nothing to do with you. Wrong CEO. Wrong sector. Wrong moment. That’s all it takes. One bad break and you never get back to where you were, and the older you are when it happens, the higher that probability climbs.
Save like the floor can drop. Because sometimes it does.
The Global Retirement Index
This index exists for a reason: it responds to a genuine need.
I’ve wondered myself, more than once, whether there is a real arbitrage opportunity hiding inside retirement planning. A gap between where most people end up and where careful thinking could take them. It only makes sense to ask when you consider how much time, energy, and anxiety we pour into optimising for this one goal.
Unfortunately, the index feels like it was mainly built for politicians. A tool for bragging rights. A way to point at a number and say: look what we built for our citizens.
Whether those citizens agree is a different question.
For the curious expat, the person actually willing to pick up and move in pursuit of a better retirement, the index could offer more traction. And that feels like a missed opportunity, because the whole point of ranking things is to make decisions easier.
If the reader can’t take any action from the output, why build it at all? Oh look, on Mars the live better than here. Too bad I cannot move there. If you cannot move to a place, it might as well be a work of fiction.
In this regard, the Quality of Life part of the index should consider the following (kind of tongue-in-cheek but…):
- how racist is the local population
- how proficient the average dude is in English
- how easy is to travel in/out (quality of transport infrastructure)
The Health Sub-Index: Why It Matters More Than You Think
The Health sub-Index is one of the most important components of this ranking. Healthcare costs are the single biggest financial wildcard in retirement: one bad diagnosis can unravel decades of careful planning.
Luxembourg sitting at the top shouldn’t surprise anyone who’s spent time there. I lived there for six years, and I can tell you firsthand: the healthcare is genuinely free. Not “free with a €200 copay” free. Not “free but good luck getting an appointment” free. You walk in, you get treated, you walk out. Wallet untouched.
I also spent six years in the UK. The NHS is not free healthcare, it’s prepaid healthcare, and the quality of what you get has been declining at an alarming rate. The saving grace? Private insurance isn’t prohibitively expensive, and with it, the UK system punches close to a decent level. For now.
The Finances Sub-Index: Good, But Missing Some Nuance
The Finances in Retirement sub-index is well-constructed, but some inputs are too locally-anchored to be universally useful. Tax burden is the obvious example.
Several European countries offer preferential tax regimes for expats: Portugal’s NHR, Italy’s flat-tax regime, Greece’s 7% flat rate for foreign pensioners. The general tax pressure of a country is still a relevant signal (they can always change the deal for expats), but for a guide aimed at retirees, ignoring these regimes means ignoring the actual decision calculus for a meaningful chunk of the audience.
The Quality of Life Sub-Index: We Need to Talk About Sunlight
I’ll be honest, I was hoping Brexit would at least free UK investors from MiFID’s stranglehold on US-listed ETFs. It didn’t. I was also hoping the current geopolitical moment would kill off absurdities like the Happiness Index. It hasn’t 🙁
But here’s what’s actually missing from the Quality of Life sub-index: a measure of annual sunlight exposure.
This is not a trivial variable. Nordic suicide rates are not a coincidence. Spending four months a year with two hours of daylight is genuinely bad for human beings. So is spending four months a year in perpetual daylight…if you care about sleep quality at all. Luxembourg, where I once genuinely forgot the sun existed until it reappeared after a full month of clouds, sits somewhere in the middle. And not in a good way.
Eight of the top ten in this sub-index are, by any sun-based metric, miserable places to live. I say this as someone from a part of Italy where the air quality is so bad it should be taxed by the breath, like cigarettes, and the tap water would grow you a third eye. We have terrible infrastructure. But we have sunlight, and the data treats that as worth exactly zero.
That’s a flaw worth fixing.
The Income Per Capita Problem
Income per capita is a useful proxy for a country’s economic health: more resources means better infrastructure, better services, better everything. But as a retirement metric, it cuts both ways.
Switzerland is the textbook case. By almost every objective measure, it’s an excellent country. But retiring here means keeping pace with one of the most expensive cost structures in the world. High income per capita often just means high everything per capita.
The obvious fix would be a purchasing-power-adjusted version of the index. Would Switzerland justify the premium over Slovenia or Austria? The raw data doesn’t tell you. A normalized “value per euro spent” metric would. It wouldn’t be perfect, but it would be far more actionable for the retiree actually trying to make this decision.
Bottom Line
This is genuinely useful research.
But the biggest risk to an optimized retirement isn’t picking the wrong index score. It’s the quiet erosion of the freedom to choose at all. If current trends hold, the constraint won’t be “which country is best”, it’ll be “which country will still let you in” 😉
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