How Do People Around The World Plan For Retirement?

Written by Sally Perkins

Globally, most governments provide for some form of social security and retirement income. But as human lifespans are increasing by approximately three years every generation, there is a global trend of governments pushing back the age at which retirees can claim social security benefits. With government retirement schemes struggling to accommodate a growing population of retirees who are living longer than ever, the burden of saving for a comfortable and fulfilling retirement is increasingly being passed on to the individual.

The rule of thumb for financial planning is to assume you’ll need about 70 percent of your pre-retirement earnings to maintain your standard of living into retirement. In the United States, Social Security benefits will cover about 40 percent of your income, but unless you can count on some kind of windfall before your mid sixties, that leaves a 30 percent gap that either needs to be funded by a retirement savings account or a drastic lifestyle change.

As you think about your own retirement plans, you might take inspiration from how other workers around the globe prepare themselves for their retirement, financially and otherwise.

Going Dutch

The Netherlands regularly ranks among the best pension systems in the world with benefits from the 3-pillar pension system amounting to about 70 percent of pre-retirement income. There’s many factors that explain why this system is so healthy, but a key piece is that pension funds are compulsory, much like paying into Social Security in the US, only in the Netherlands it generally provides enough to live on comfortably during retirement. But for younger workers who make a good income and want to invest their money more aggressively, this system can make them feel handcuffed as their earnings have to go into the same investment pool with the earnings of older workers for whom risky investments wouldn’t be prudent. And as the lifespan of its population is growing, starting in 2022 the age of retirement will be linked to life expectancy and Dutch workers may need to wait even longer to access their pensions.

An Aging Southeast Asia

Compulsory retirement at a certain age for private sector employees has generally been deemed discriminatory in most nations, but is still in effect in Singapore where, under the Retirement Age Act, employers can mandate retirement starting at age 62, the minimum retirement age nationally. Thailand has a population that is aging faster relative to other Southeast Asian nations, and in spite of statutory severance pay for workers age 60 and over, most Thais have no post-retirement income plan. In Malaysia, workers must fund an Employee’s Provident Fund (EPF), but as with US Social Security, it’s rarely enough to provide a livable income post-retirement and workers are encouraged to find strategies to save for retirement.

UK Workers Push Past Retirement Age

More than 1.4 million over-65s in the UK continue to work at least part time, either because they need to make ends meet or simply because they want to. There’s a certain stigma around retirement, that it’s the end of something rather than the start of an exciting new chapter, which has contributed to many working past retirement age for fear that they will feel useless or lose their edge without work. There’s also less incentive to retire in the UK since workers can continue to work beyond the State Pension age and still receive their State Pension. But according to the Office for National Statistics, health and wellbeing often increase while depression and anxiety fall once workers are no longer burning the candle at both ends. The tradeoff may be well worth it.

Swedish Death Cleaning

One of today’s trending retirement routines comes from Sweden where the act of “death cleaning” helps people prepare for the last act of their life. Honestly less morbid than it sounds, Swedish Death Cleaning is about enjoying the process of going through and paring down your possessions to be able to focus on the really important things. It’s also an act of respect for your loved ones who ultimately end up responsible for your things when you eventually pass away. People in Sweden – and worldwide – have found that downsizing earlier in retirement not only simplifies one’s day to day life, it lifts a psychic weight that makes retirement more carefree. Downsizing – a Global Trend?

Minimalism isn’t unique to Scandinavia, though they seem to have perfected it. Worldwide retirees are finding that by shedding worldly possessions or attachment to a place, they are prepared to travel in retirement or settle in another country where their retirement savings can stretch much further.

While the specifics of retirement schemes may vary from one country to the next, it’s fairly universal that people all over the world must plan ahead to be able to have financial freedom in retirement. Whether that’s saving money on top of pensions or preparing to live a more streamlined and affordable life, foresight is the key.

Why We Don’t Plan for Retirement

Guest Post by Rob Schultz, The Retirement Guy

I recently read an article, “10 Retirement Lessons from a Retired Retirement Pro”, by Richard Quinn that had been published in MarketWatch and HumbleDollar. The article’s opening paragraph struck a chord with me and I share it here.

“For the better part of 40 years, I spent a great deal of time helping thousands of workers prepare for retirement. We ran seminars for workers and spouses on topics like retirement income, insurance, lifestyle, relocation and more. I think it’s fair to say that, if someone took advantage of the programs offered, they would have been well prepared financially and emotionally for retirement. Sadly, relatively few workers utilized all that was available to them—this despite the support and urging of the unions that represented them. I retired in 2010, suffering in part from banging-your-head-against-the-wall syndrome.”

Since I blog and teach about retirement planning in a similar fashion to what Mr. Quinn did, I can empathize with his frustration and head-banging. I have struggled myself with the question of, why the vast majority of people do such a poor job of planning for something that could last for 20-40 years of their life?

I believe the reason is because there are no immediate consequences for not preparing for retirement. For example; if I continually violate the speed limit, chances are I will eventually get a ticket. If I drink and drive, I am going to eventually lose my license. If I don’t pay my utility bills, I am going to have my water, gas & electricity cut off. If I don’t make my car payment, I am going to have my car repossessed. You get the picture. There is a quote which I attribute to my pastor friend, Dix Winston. “You can choose your actions or you can choose your consequences, but you can’t choose both”. Most of our actions in life, have fairly quick consequences. But retirement doesn’t work like that. You can go along for 20, 30, 40 years without planning for your retirement and for the most part nothing terrible happens, until it is too late.

I am frustrated by people that identify a problem, but offer nothing in the way of a solution, so I will propose one. Financial literacy education, beginning in elementary school, is a practical way to address the problem of not only retirement planning, but also; inadequate savings, debt, poor credit, budgeting, etc..

Bob is a retired human resources guy who blogs about retirement planning on his website,

Here’s to Your Health in Retirement

(Taken from “I Want to Retire! Essential Considerations for the Retiree to Be”)

Joy and temperance and repose, slam the door on the doctor’s nose.~ Henry Wadsworth Longfellow

I think it is reasonably safe to say that at this stage in our lives we have all been made well aware of the importance of doing those things that are healthy and good for us. With worldwide attention focused on the benefits of organic foods, vitamins, nutrition, weight consciousness and cardiovascular health, we would have to be living in a cave to not have tuned into the familiar song. Avoid too much of this and be sure to do at least “x” amount of that. Make sure your diet includes some “y” and don’t even think of putting that into your body. It can be somewhat confusing but at a high level I think by now we get it. We know the basics of what we need to do to stay healthy. Of course what we choose to do with this information is a different matter.

While recently on vacation in Mexico my wife and I noticed something alarming. We had been coming to the same spot each year for many years but something seemed different this time. The average vacationer was easily 55 or older – nothing new there. But it seemed that a much greater percentage were overweight and not by just a little. We also noticed more of the older people moving slowly and struggling as they walked up from the beach toward their room. We could not help but compare with a trip to Switzerland some years ago where the old people – some very old – could be seen mixed amongst the younger generations as they up the nearest mountainside. Swiss women in their seventies had their hiking sticks in hand with chins pointed to the nearby peaks and if you walked too slowly in front of them they passed you by. We did not notice any of the locals overweight by more than a few pounds. It appeared the active lifestyle of these residents kept them fit and healthy well into their later years allowing them to enjoy their life to the fullest.

In defense of the non-Swiss we did meet a wonderful 89 year lady old while vacationing in Mexico who breathed a little hope into all of us not-quite-yet-there in years. Throughout the week, she remained in a state of perpetual motion walking far and wide across the resort letting everyone know that it was her way or the highway. The exciting and vividly described stories of her past left no doubt that she was still very much with it. She was not a single pound overweight and although careful where she put her feet she kept moving ever onward. There is hope that no matter where you are from you can positively impact your state of health by making the effort.

A reader of my blog put is well when she offered her advice encouraging those in retirement to get and stay as fit as possible and to do and go before good health and stamina abandon you. Such a large percentage of health issues for all Americans are the result of bad personal choices.

We should not downplay the significance of eating right and exercising to encourage a healthier you. If you want to live a truly excellent retired life it helps to be healthy in mind and body. That said, I don’t think we need to rehash the various philosophies of health or review the multitude of programs that can help to get you where you want to go. It would be surprising if you did not already have your favorite program or training routine by this point.

What I believe can be helpful is to highlight some simple and universal keys that apply across all programs intended to make you healthier. This is not a prescription for perfect health but rather observations made after many years attempting to stay on the healthy path as much as possible.

I am one of those fortunate folks who actually enjoy exercise and working out. Over the years I have created my own routine that combines cardiovascular for the old ticker, stretching via a combination of Yoga and Pilates to work the core and promote flexibility, and weight lifting to keep the biceps flex-worthy for as long as I can. I make exercises part of my every day. If I do not do something in the way of exercise each day, I miss it. If I miss two days in a row I actually feel a little bit off and even slightly agitated. Fortunately I know the cause of my restlessness and the cure is as simple as getting active and working out.

No matter how good it is for us, not everyone looks forward as I do to sweating on the bike or lifting weights. With that in mind I want to share a few practices that have worked for me over the years and might help in your efforts to do the right thing and live a healthier lifestyle. Don’t expect anything earth shattering but rather some common sense principles to consider as you pursue your own good health in retirement.

Find an exercise that you can tolerate and stick with it

I wish I had started preparing sooner, but it’s really never too late to improve your life and prepare for a healthier and more robust future.

To achieve results – short term as well as long term – you need to stick with it, whatever routine or program or combination of routines or programs you ultimately decide upon. You want to perform your exercises regularly and consistently. Busting your butt for a few months and then giving it up will not do much more than bust your butt.

If you hate what you are doing it will be difficult to maintain it. You will find excuses and you will likely fail. Though it may not be possible to find an exercise you actually enjoy at the very least try to find something that you can tolerate. Having a partner can help you on those days when you would rather be doing anything other than exercise. The two of you can push each other and support your common goals.

Try to think long term as you investigate the many options available. Healthy exercise and lifestyle is the job of a lifetime with no time off for good behavior. Realize that whatever you decide upon will become a part of your world for the foreseeable future. With that in mind you may want to include a variety of exercises and practices in your routine. Variety can help to keep things fresh as well as work different parts of your body in different ways.

Fortunately your choices of what exercises to do are seemingly endless with new programs popping up all the time. Had you heard of Zumba a year ago? Cross fitness sounded like some kind of clothing line until its recent rise to popularity. Yoga in its numerous forms and styles has grown impressively in popularity offering different strokes for different folks with very age appropriate options. For some having a set of barbells and an exercise bike in the garage is all it takes. Any of these options can help improve your health situation as long as you stick with it.

I know it takes work but the key is to start as early as you can and exercise, eat right and if you develop health issues, be proactive about managing them. Whatever your health issues are, there are things you can do to improve the quality of your life. My husband and I are almost 60 and we are both in really good health but we drink green smoothies daily, walk every evening and recently took up Tai Chi. I think many seniors just think ill health is part of life and they accept it without trying to improve the situation. Or they pop a pill and call it good.

So do your best to find something you enjoy or at least do not hate doing. Find a workout buddy who will motivate you when necessary and you them. Plan to stick with it long term to match your long term longevity target. And get ready to get healthy to enjoy that retirement you have worked so hard to get to.

Short cuts don’t work long term

Don’t try to fool yourself – staying healthy is a lifetime commitment. There are no quick and easy shortcuts. Diets and the latest and greatest fads may help you quickly drop a few pounds. But once you get to that reduced weight how do you maintain it? One diet prescribes no carbs while another supposedly equally effective option may require you eat nothing but carbs. One diet allows no fat consumption while the other allows for all the fat you want from meat, cheese and butter. Do you want to continue long term on a diet which although it may trigger a quick weight loss often excludes some part of a healthy balanced diet?

Although I do not personally like the idea of diets that generate quick reductions, I understand the attraction. For a short term fix I will concede that a diet may have some value. After years of living with extra pounds it can feel good to lose that excess weight. That being the case, how much better would it be to sustain the loss beyond just the next weeks and months? Wouldn’t you prefer a lifestyle adjustment that keeps you lean and mean for the foreseeable future? When it comes to doing the right things to live a healthy life, you don’t want to cheat yourself. Play the game by the rules, accept that you will need to be living healthy for the rest of your days, and you are off to a good start.

Don’t take the easy way take the exercise way

How many of us choose to take the elevator rather than walk a few flights to our destination? Or how often do we jump into the car to drive the few blocks to the local store? An easy way to add some exercise to your day is to choose to burn calories rather than store them. Use your legs rather than your rear end. Walk to the post office rather than drive. Get off your couch during halftime and move around. Don’t look for the easy way to do things. Try to get yourself into the mindset of moving more. If you are sitting back and enjoying a long movie why not pick up some dumbbells and do a little lifting? Or stretch out on the floor and do some sit-ups? You can always do some stretching for flexibility even while continuing to watch your show. Be creative and be healthy with a bit more movement and activity in your life. Don’t look for the easy way, look for the exercise way.

I can’t say how I’ll feel in 25 years if I’m still around but I just hope I’m still out there going for my walks and doing Yoga. I’ve seen so many seniors just kind of give up and vegetate in old age. They won’t eat right or go for walks or other simple things that would improve the quality of their life. What’s the point of living to be old if you spend 15-20 years sitting and staring at the TV?

Everything in moderation

Temptations surround us. We each have our own special weaknesses whether wine or chocolate, cake or hamburgers, ice cream or chips. If we cannot control ourselves when it comes to these delicacies we can be in trouble. Man does not live by (your favorite temptation here) alone. However, in moderation with a modicum of control, giving into temptations can be acceptable. Too much of almost anything can be a bad thing.

Don’t overdo it but on occasion it is okay to do it.