Australia ranked 6th for retirement wellbeing

Australia has retained its position among the top 10 best places for retirees because of improvements in financial security and health, according to a survey of 43 countries.

However, Australia has dropped out of the top ten in terms of the overall quality of life because of lower scores in levels of happiness and biodiversity, the Natixis Global Retirement Index shows.

Australia also has work to do on the environmental front, ranked ninth lowest for environmental performance, despite holding the highest overall air quality score.

The index, now in its sixth year, is compiled by French investment giant Natixis Investment Managers with global market research firm CoreData.

The study covers four key factors for welfare in retirement: the material means to live comfortably in retirement (material wellbeing); access to quality financial services to help preserve savings value and maximise income (finances in retirement); access to quality health services (health); and a clean and safe environment (quality of life).

The index is based on 18 indicators, including life expectancy, income per capita, old age dependency, inflation and real interest rates, among others

Natixis chief executive Damon Hambly said Australia should be proud of the ranking and the building of a retirement system considered "among the best in the world," but cautioned that there's still a long way to go – and it will be of little comfort to Australia’s aged care sector, which is bracing for a royal commission into reports of widespread abuse.

“Despite the country’s good results overall, revelations from the banking royal commission show that Australia still has further to go in terms of improving standards in our financial services sector, which is central to the quality of retirement outcomes," Hambly said.

“Strong social programs, widely accessible healthcare and low levels of income inequality are the hallmarks of high-ranking countries, and these are all evident in Australia.

"However, no country is immune from the challenges associated with an ageing population, higher life expectancies and low interest rates, all of which strain government resources and put more of the financial burden on individuals.”

Top 10 Countries for Retirement Security (Source: 2018 Natixis Global Retirement Index)

Switzerland edged out Norway to claim to top spot with higher scores for quality of life - thanks to better air quality and environmental factors, finances, and health.

Iceland moved up into second, with the highest score in material wellbeing. A sharp decline in finances pushed Norway to third overall.

Nordic countries including Iceland, Norway, Sweden and Denmark continue to dominate the top 10.

"While these countries have relatively good scores across all sub-indices, they truly stand out from the others with much higher scores in the material wellbeing and quality of life sub-indices," the report said.

"Northern Europe has very strong health care systems and new medical technology, which both support the needs of an aging population."

On the way out of the top ten is Germany - ranked seventh in 2017 and 2016 – due to declines in the Finances sub-index. It dropped six spots to 13th overall.

Countries in the bottom of the rankings include BRIC (Brazil, Russia, India and China) countries – with all four finishing in the bottom six overall.