For many years now, we've contributed to InternationalLiving.com's annual Global Retirement Index. It's a ranking of the 24 countries that InternationalLiving.com editors feel offer the best potential for anyone considering moving abroad for a more affordable or adventurous retirement.
But does an index like this really help people decide where to move?
Let's be clear... if you just choose the top country on the index and then move there expecting to live happily ever after, you probably shouldn't be thinking about moving abroad in the first place. Deciding to change your entire life and relocate somewhere with a different culture, economy, government and probably a different language altogether isn't the kind of thing you do by picking a country off a menu.
But as a place to start thinking about destinations and what might make them better or worse choices for your individual and particular situation, indexes like the Global Retirement Index are, in our opinion, valuable research aids.
Panama is the best country in the world to retire to in 2014, according to InternationalLiving.com's annual Global Retirement Index.
Photo courtesy of Hugo Ghiara, InternationalLiving.com
InternationalLiving.com uses eight categories to rank potential retirement countries. Much of the information used to determine and score those categories comes from objective sources... statistics that various organizations compile about things like Internet availability, miles of paved roads, airport infrastructure, power grids, average national income and the like. In this sense, it's just a numbers game, and the numbers speak for themselves. There isn't much judgment or juggling to do... if one place has a higher average annual temperature than another, that's just a fact.
But it's the subjective part of this index that we think makes it most valuable. Let's take the climate rating for particular countries again. Does knowing an average annual temperature of a place tell you much about whether or not you'd personally enjoy living there? Probably not. There are really only two ways to find that out with any confidence... one is to go there yourself and stay a year, and the other is to ask people who already live there what they think of the weather.
That's the subjective part of any good retirement index... getting the opinions of expats who are already living abroad in various countries and blending those opinions in with the stats and hard data.
The result isn't an index that will tell you which country is best for you. The result is an index that shows what people who have already done what you're thinking about doing found best for them, and why. It also shows what people like us, who write about and live in those places ourselves, have learned from those retirees and how they're getting along in their own personal adventures.
We think the subjective part is what makes indexes like the Global Retirement Index valuable in the first place. You can crunch all the numbers for all the categories of all the places in the world you want, but until you factor in how those numbers translate into actual living conditions for retirees and other expats, it's just a glorified spreadsheet.
One thing you may notice about this index... there is no general country category for safety or crime. There are a few reasons for that, but the main one is that crime statistics can vary hugely between different regions, cities, towns and even individual neighborhoods within a country. Mexico and Honduras are just two examples. Both have some very specific areas where crime is rampant... and both have huge areas outside those places where expats are living safe and secure lives at this very moment.
Think about Detroit and Chicago... do the murder rates in certain neighborhoods in those cities mean that there are no safe places to live in Detroit or Chicago or the U.S. in general? Of course not. But the murder rates in those neighborhoods and some other dangerous places around the country get factored in to the national crime statistics. So looking at the annual crime numbers for the U.S. doesn't give you much of a clue about how safe it might be to live in Boise or Sioux Falls. Same with the rest of the world.
Long story short: indexes like the annual Global Retirement Index are great places to start your research. They're easy and functional ways to help you narrow down your list of destinations that might fit your own personal criteria. We've written many times before about the need to ruthlessly profile yourself regarding what you really want in a place to retire... and what you really don't want. By being as honest as possible with yourself about what you can and can't abide in your own personal living situation, you'll be able to match those requirements to the countries on the index that look like a good fit and come up with a reasonable short list.
THEN the real research begins.