The Netherlands is one of the five most attractive countries for retirement, according to Natixis IM’s 2021 Global Retirement Index.

Natixis IM is releasing the Global Pension Index for the ninth time this year. It gives scores to various factors affecting retirement conditions in 44 countries. The total score for each country is based on eighteen factors in four broad categories: pension, material well-being, quality of life and health.

Compared to last year, the Netherlands receives lower scores on the quality of life and financial support index. Material well-being (third), the highest ranking in the Netherlands, higher scores than last year. The Netherlands ranks first in employment, eighth in income equality and ninth in personal income.

There have been some major changes in the global rankings. Iceland, Switzerland and Norway are still in the top three, followed by Ireland, the Netherlands, New Zealand and Australia. Meanwhile, Germany and Canada have moved up: Germany is eighth and Canada is tenth. Denmark is in ninth place.

The UK is notable for falling for the fourth year in a row. In the UK, the pension outlook is weakening amid the economic woes caused by the Govt-19 epidemic. Brexit would not have helped.

One in the United States, two in Europe

Some regional results: Western Europe ranks second next to the United States with an overall score of 69%, but has higher scores on both health and quality of life sub-indices.

For the third year in a row, North America has the highest score of 72% in all regions. North America dominates the overall rankings, with the highest regional score for both financial and material well-being sub-indices and the second-highest for health and quality sub-indices.

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Problem of interest

Retirees are particularly vulnerable to low interest rates and rising inflation, both of which affect their income. For many, securities are a cornerstone of their retirement investment because they have a lower risk of loss. But low interest rates and high inflation make investing in risky assets necessary to generate income and ensure adequate retirement income.

However, investment risk should be minimized over time to avoid capital fluctuations. That means (almost) retirees should have a low-risk investment strategy. This puts the saved capital at risk of being destroyed by inflation. In addition, many pension funds are converted from limited benefit plans to limited contribution schemes.

According to a previous survey by Natixis, private investors are aware that pension liability is becoming too high for them. As a result of switching to limited contribution schemes, the majority (80%) claim that they are more likely to work for a company that offers adjusted pension contributions.