How to Retire Like a European Socialist (and Why You Might Want to)

Believe it or not, European countries have the most secure and best retirements. However, Americans can emulate their type of financial security using their own resources here.

According to the 2021 Natixis CoreData Global Retirement Index, 7 of the top 10 best countries for retirement are located in Europe, out of all the nations analyzed in Natixis’ study.

The index ranks countries based on four themes covering key aspects for welfare in retirement:

  • Health: Good health and access to quality healthcare
  • Material well being: How well can retirees support themselves
  • Financial: Economic factors like government services, inflation, interest rates, taxes and other economic factors
  • Quality of life: Happiness and environmental considerations

The top 10 nations for retirees in 2021 are: Iceland, Switzerland, Norway, Ireland, Netherlands, New Zealand, Australia, Germany, Denmark, and Canada. (The United States is now ranked as the 17th best place to be retired.)

Key factors contributing to European countries’ high rankings include high per capita wealth, sound financial systems, universal healthcare systems, and government policy geared toward ensuring high standards in terms of the environment and overall well-being of citizens.

The United States, meanwhile, is benefiting from increasing economic stability but is negatively impacted by government indebtedness, rising inflation rates, income inequality, and a healthcare system that doesn’t live up to its highest-in-the-world expenditures.

The Three Legs of a Retirement Stool

Employers, governments, and individuals comprise the three legs of the global retirement savings stool, and each has a role to play in improving the state of savings around the world.

In most countries, a secure retirement depends on an individual receiving benefits from the three legs of that stool. In the United States, that means Social Security and Medicare from the government, and pensions or savings plans through your employer (as well as personal savings).

However, savings rates are lower than they need to be in the United States and traditional pensions are becoming a thing of the past. With retirees increasingly needing to take control of their financial future, here are a few steps to take for a safe, financially secure retirement in the U.S.

How to Retire Like a European Socialist Even if You Are a U.S. Citizen (and Capitalist)

1. Have a Financial Plan

Responsibility for financial security in retirement is falling even more heavily on individuals than ever before, according to the Global Retirement Index—a trend that’s likely to continue as government resources in countries around the world become scarcer and budgets continue to be strained.

Leading up to retirement, carefully planning a retirement path could be the most important steps someone could take to achieve financial security later in life.

“It is becoming increasingly apparent that to ensure financial security in retirement, individuals need to take personal ownership of their destiny and view planning and saving for retirement as a serious, conscious and strategic pursuit,” the Natixis report says, adding that the role of the financial advisory community has “never [been] more critical.”

Build and maintain your plan with the NewRetirement Planner.

2. Optimize Social Security Benefits

Social Security benefits are an important part of many Americans’ retirement income.

That’s why optimizing Social Security benefits can be crucial to achieving a secure retirement. The average Social Security retirement benefit in 2021 was about $1,555. However, according to the Center for Retirement Research at Boston College, 90% of Americans begin collecting Social Security retirement benefits at or before their full retirement age. The most popular age to start is 62, the earliest age possible — chosen by 42% of men and 48% of women.

Delaying the start of benefits can significantly boost your lifetime payout from the system. Use the Social Security Explorer in the NewRetirement Planner to figure out the best time for you to start your benefits. You can also review how to qualify for the highest possible Social Security benefit.

3. Save, Participate in Employee Plans, and Create an Income Stream for Yourself

Many of these European countries have pension plans that enable their citizens to retire with a guaranteed income stream.

Pensions in the United States are now difficult to come by. It is therefore important that you save robustly for retirement on your own and know how to turn those savings into an income stream.

Explore 18 retirement income strategies for lifetime wealth and peace of mind.

4. Plan for Healthcare Costs and Be Proactive About Your Healthcare

Even if the U.S. government does spend a lot of money on healthcare, many retirees are surprised by the high out of pocket costs of medical expenses, even with Medicare. And much has been written lately about the shortages of doctors serving Medicare patients.

One way to protect yourself is to explore Medicare Supplemental insurance, which can minimize your out of pocket expenditures and may help you get appointments with the doctors you choose.

Furthermore, in the United States, it is critically important to plan for medical costs.

The NewRetirement Planner will help you make a personalized estimate based on your health status, where you live, your age and other factors. You may also want to explore 12 surprising ways to save on health care costs.

5. Plan for Economic Factors that May Impact Your Financial Security

Economic forecasting is impossible, but today’s retirees face the potential for rising interest rates and rising  inflation economic factors that we have not had to deal with for a long time.


  • What impact might inflation have on your retirement security? Run scenarios in the NewRetirement Planner to assess your future assuming different inflation rates to find out.
  • Make sure any debt you are carrying is at the lowest possible interest rate now. And, reconsider future plans to take on debt if interest rates continue to rise.
  • Are you ready to weather a downturn in the stock market? Determine and maintain your optimal asset allocation based on your goals and timeline.

6. Find Ways to Enjoy Working Longer

The average retirement age in Iceland (the best country to be retired) is 67. So, if you want to retire like a European socialist, maybe you’ll need to work a bit longer.

Work can be a grind. It can also be immensely enjoyable. If you need income, but want to retire, consider switching jobs. Do something that gives you pleasure while also providing some kind of paycheck.

Use the NewRetirement Planner to assess the impact of working longer (even at a lower income or part-time). And, explore some of the NewRetirement work and retirement resources.

NewRetirement Planner

Do it yourself retirement planning: easy, comprehensive, reliable

NewRetirement Planner

Take financial wellness into your own hands and do it yourself retirement planning: easy, comprehensive, reliable.

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