Baby boomers are retiring by the millions. Born between 1946 and 1964, their transition out of the workforce in droves is having drastic implications for the economy. In 2008, the number of people in this generation over 65 and above was approximately 56 million. Fortune reports that by 2030, it is estimated that this figure will reach over 75 million, a double since 2008.
The key concern for this generation is that it lacks the financial resources needed to live a comfortable life after retirement. 45% of the retiring boomers lack retirement savings completely. The other 55% have saved, but 28% of them only have about $100,000 in savings, reports IRI. As a result, more than half of this generational cohort will be living off Social Security Benefits in large part.
With more retirees beginning to receive Social Security benefits, it is only a matter of time before the Social Security funds likely get depleted. A report by Social Security Administration (SSA) states that provided no adjustments are made, the OASDI trust will likely run out by the year 2033. Before this happens, the cap on OASDI taxes will likely be raised along with the retirement age.
Furthermore, a lack of funds means many boomers plan not to retire and intend to work through the 60s. However, social security benefits max out at 70, which is the age when boomers are likely to leave the workforce for good. As a result, the U.S. Bureau of Labor Statistics reports a labor force growth of only 0.5%, a rather slow rate. This slow growth will further shave percentage points off of annual economic growth.
Besides the lack of financial planning, the lack of retirement funds can be attributed to the stock market decline during the Great Recession. Older adults resorted to panic-selling, which decimated their retirement accounts. Low-interest rates followed the latter years, undermining the yields of bonds that were purchased instead. Any yield invested in capital returned minimal interest, and there was nothing to revamp retirement savings in their final years. The final blow, however, was definitely the pandemic-led panic selling in February and March 2020.
The market is also answering to the increasing number of retirements in different ways. Some examples come from Centene Corporation (NYSE:CNC), Welltower Inc. (NYSE:WELL) and AmeriSourceBergen Corporation (NYSE:ABC). Centene Corporation (NYSE:CNC), for instance, is investing in innovative healthcare solutions for an aging population, and in this regard, the company has partnered with San Diego State University's Center for Excellence in Aging and Longevity.
Welltower Inc. (NYSE:WELL), on the other hand, acquired 33 properties for $0.5 billion in its partnership with StoryPoint senior living community. AmeriSourceBergen Corporation (NYSE:ABC) has initiated a $150 million venture fund to finance emerging healthcare companies. Companies like AmeriSourceBergen Corporation (NYSE:ABC), Welltower Inc. (NYSE:WELL) and Centene Corporation (NYSE:CNC) have sensed the bullish outlook for industries like healthcare and senior-living amid an aging population.
Repercussions of the Retirement Trend
The 19th Annual Retirement Survey of Workers conducted by the TransAmerica Center for Retirement Studies reports that the generation has saved only an average of $152,000 for their golden years. Typically spending $48,885 annually on average, people between 65 and 74 will likely need to downgrade their lifestyles to survive retirement. Even worse for this generation is that 2022 is a bad year to retire.
The Global Retirement Index Report states that the major culprit behind a bad retirement year is all-time high inflation, eroding the value of the accumulated wealth of millions of people. Besides the huge volume of people retiring, an added concern is how long retirees will live. A report by OECD shows that the average life expectancy for women over 65 reached 21.3 years and 18.1 years for men between 2015-2020.
With increased life expectancy rates, it is projected that the over-65 population will likely increase from 17.3% in 2019 to 26.7% by 2050. Greece, Italy, Portugal, Japan, and Korea will have 30% of the over-65 population by 2050. These staggering numbers will likely crumble the retirement systems in economies, as most of them are based on payroll taxes to fund social security benefits.
With fewer working people supporting a higher old-age population, the support ratio is likely to fall by 0.26% per year in the U.S. Developed countries will experience a fall of 0.40%, and China will face a fall of 0.80%. As the old-age dependency ratio climbs, which is the number of retired people out of every 100, policymakers will face complex challenges, with retirement benefits competing with an increasing public debt burden.
Retirement-Related Movement
The U.S. The Department of State reports that roughly 9 million U.S. citizens have been living abroad as of the year 2020. Retirees choose to relocate in their attempt to stretch their dollar and pension benefits. Retiree incomes can go further, with the dollar's strength being an advantage over several foreign currencies.
Many retirees are also retiring amidst the aftermath of the global financial meltdown. The decimation of home values and the ravaging of 401(k) has led a large part of retirees to look at foreign countries. Those with milder climates, resilient economies and cheaper living costs have been the top choices for retirees.
The Travel Market Report states that as many as 3.3 million Americans are planning to retire abroad. International destinations like Costa Rica and San Jose are much cheaper than the U.S. For instance, consumer prices are 59% lower in Thailand than in Boston. Groceries in Spain are 36% lower than in San Francisco. Other motivations behind retirement moves are cheaper healthcare, a $2000 monthly expense, and a thrust for adventure.
Mark Hebner, president and founder of Index Fund Advisors, Inc., has the following to say:
"Aside from solely relying on Social Security, looking to downsize your home, moving to a more affordable state, relying on public transportation, and having a robust budget that itemizes discretionary and non-discretionary items are all a good start. The most important thing is that retirees have the right mindset about their lifestyle in retirement. This is why it is important to start making lifestyle adjustments before you retire."
20 Best Countries to Retire Overseas Where English is Spoken
Arseniy Krasnevsky/Shutterstock.com
Methodology
In order to identify the 20 best countries to retire overseas where English is spoken, we have taken a look at ten (1,2,3,4,5,6,7,8,9,10) different sources. Each time a country appeared on a list, it was awarded a score of 1. We then ranked the countries in our list in ascending order of high score.
Best Countries to Retire Overseas Where English is Spoken
20. Dominica
Insider Monkey's Score: 1
Dominica is one of the best countries to retire to, with its wonderful natural parks, beautiful forests, and breathtaking beaches. The beautiful Caribbean island is ideal for those who wish to spend their golden years away from skyscrapers and concrete. With the cost of living much lower than in Europe and North America, it is a safe country to live in, with stable currency and easy-to-acquire citizenship.
19.Gibraltar
Insider Monkey's Score: 1
Gibraltar is a beautiful place to retire, blessed with a Mediterranean climate and lots of sunshine. It is a British overseas territory that offers a special income tax regime, with minimal income tax deductions for those looking to retire with passive income from investments and savings. This country is known to be a bridge between Europe and Africa, having a touch of both cultures and cuisines.
18.Isle of Man
Insider Monkey's Score: 1
Isle of Man is a self-governing British crown dependency and is one of the best places for english-speaking retirees, with 86% of people living in the country stating that they are enjoying an excellent quality of life with amazing lifestyle opportunities, according to the Isle of Man Social Attitude Survey Report. Deemed one of the safest islands to live in the British Isles, it is also one of the only island nations to be awarded a UNESCO Biosphere status.
17. Jersey
Insider Monkey's Score: 1
Jersey is a channel island boasting a high quality of life and a booming finance sector. It has one of the lowest crime rates, with a safe transport system and friendly people all around. Those retiring to Jersey should know that the income tax is flat at 20% only, and there is no capital gains tax.
16. Vanuatu
Insider Monkey's Score: 1
Vanuatu is a popular destination for retirees, with half of the population speaking English. Voted twice as the happiest place on Earth, it has the cleanest beaches, friendliest people, and an all-year-round sub-tropical climate to enjoy. People over the age of 55 who have retired in their country of origin can apply for a residency permit in Vanuatu.
15. Puerto Rico
Insider Monkey's Score: 1
Voted as one of the best places to retire, Puerto Rico offers a high quality of life and an easy-to-obtain residency. It is an unincorporated territory of the US. Therefore, it doesn't count as a sovereign country but not as a US state either. That said, it has spectacular cities, low healthcare costs, affordable rental prices, and even low restaurant prices. Overall, living here costs 8.12% less than anywhere else in the U.S. The two most widely spoken languages are Spanish and English.
14. Bahamas
Insider Monkey's Score: 1
An English-speaking population, the Bahamas is home to 400,000 people. The country is a tax haven with no capital gains tax, wealth tax, inheritance tax, etc. The people there are really friendly, and the island is home to stunning white sandy beaches. Paradise Landing is a premier location in the Bahamas, offering a secure and private location to retirees.
13. Philippines
Insider Monkey's Score: 1
Philippines is one of the best countries to retire overseas where English is spoken. More than 52 million people in the Philippines speak English. With a low cost of living, affordable rent, and cheap restaurants, the Philippines is an ideal place to retire.
12. Islands of Fiji
Insider Monkey's Score: 1
The beautiful island nation of Fiji is home to breathtaking waterfalls, beaches, and rainforests. It offers visa options for its retirees as well as applicants who have an assured income. As such, the overall cost of living in Fiji is 43.72% lower than in New Zealand. The welcoming and friendly environment in Fiji makes it an ideal place for retirees to live.
11. St.Kitts and Nevis
Insider Monkey's Score: 1
Another ideal destination with tax benefits for retirees to live in is St.Kitts and Nevis. Over 40,000 people in the country speak English. The cost of living is moderate, with rents ranging between $1000-1800 per month. The country also offers free-visa entry, and those wishing to retire can use the citizenship-by-investment option as well.
10. Mauritius
Insider Monkey's Score: 2
Mauritius offers its residents an outstanding quality of life. Known as the Pearl of the Indian Ocean, it is a country known for its breathtaking beauty and unique cultural diversity. Retirees are attracted to Mauritius due to its low tax rates, free public healthcare, and trained medical staff.
9. Belize
Insider Monkey's Score:3
Belize is the only English-speaking country in Central America. The reasonable cost of living, tropical climate, and friendly people make it one of the best countries to retire. Moreover, it offers a peaceful lifestyle to live on with sun-drenched beaches and soothing tropical waters. The Retirement Persons Incentive Program has made Belize an attractive retirement destination.
8. Cyprus
Insider Monkey's Score:3
Retiring in Cyprus means having access to incredible healthcare facilities, warm Mediterranean weather, and a large English-speaking community. It offers its citizens a good quality of life with fresh air, beautiful nature, and an excellent climate. Average property costs are much more affordable in Cyprus, and living costs are low too.
7. Barbados
Insider Monkey's Score:3
Barbados is one of the most developed countries in the Caribbean. The small island has excellent infrastructure, healthcare, and easy access to various international cities. Amazing beaches, a safe environment, and breezy weather make it an ideal retirement place. English is the official language here, with over 275,330 people speaking it as a primary language.
6. Ireland
Insider Monkey's Score:5
Ireland can be a great place to retire, considering its low corporate tax rate standing at 12.5%. Retirees are also eligible for tax benefits which means retirees can get possible tax exemptions on income received from outside the country. Housing, on average, is 10% cheaper in Ireland in comparison to the US.
