Norway is the best country for retirees. In this year’s Global Retirement Index by investment bank Natixis, the Scandinavian country takes first place.
For the ranking, 44 countries worldwide were assessed, according to factors such as health, finances in retirement, quality of life and material wellbeing in old age. An index score was then assigned, with 100 points the best possible result.
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Iceland is one of the biggest fallers this year. With 79 points, the island nation is only good enough for third place in 2022. In last year’s ranking, Iceland scored four points more and held the top position.
Switzerland stubbornly holds on to second position despite a loss of points, as this infographic shows.
The United States doesn’t make the top 10, only scoring 69 points and finding itself in rank 18.
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This article originally appeared on Statista.com and was syndicated by MediaFeed.org.
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Reasons why most Americans will retire poor
With the cost of living going up and the minimum wage going down, the number of poor retirees is on the rise. Workers can barely stick their necks above the waters, and people are forced to retire poor. This situation is common, although it’s more prominent in some countries than others.
Money may lag behind health, great relationships and a meaningful career in terms of importance, but as motivational speaker Zig Ziglar says, “it’s right up there with oxygen.”
The sad fact of life, however, is that less than 5% of people will be financially free by age 65. In other words, over 95% of the people will retire poor.
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In his excellent recording of The Strangest Secret in 1956, Earl Nightingale tracked the fortune of some 100 individuals who started bright-eyed and busy tailed at age 25. These people were all well motivated and eager to be successful.
“By the time they are 65, only one will be rich, four will be financially independent, five will still be working and 54 will be broke depending on others for life’s necessities,” Nightingale said.
These are alarming statistics and justifiably should provoke us to beg the question, “Why are 95% of people broke at 65?” Put another way, “Why do 95% of people retire poor?”
Here are 10 reasons that offer some insight into why people retire poor:
Related: The importance of setting your long-term financial goals
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Freedom can have a different meaning for different people. So, attaining financial freedom can have a varying definition to individuals.
The simple and straight forward definition of financial freedom is: Passive income must be greater than or equal to lifestyle expenses.
P.I ≥ L.E
To attain financial freedom and avoid being poor at retirement, the passive income from your assets must be higher than or equal the income you require to fund your chosen lifestyle. Most people retire poor simply because they have no clear definition of financial freedom for their life.
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Many people are too lazy to be productive. If you ask a hundred people how they intend to get rich, most will tell you they would love to win the lottery, marry and Heir (Heiress), or inherit a fortune. That mindset means most people retire poor because they don’t have a plan.
Sadly, hope is not a strategy, and to attain financial freedom and retire rich, you need to be relentless and ruthless in the pursuit of your goals.
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Ever come across the sentence, “Rich people think like rich people and poor people think like poor people?”
Believe me, we all have a self-concept. You have a self-concept for your weight, your business intelligence and your communication skills. Equally and critically, you have a self-concept for your current financial reality.
It’s quite fascinating, but many people who won the lottery lost it within a short period. Conversely, many people who become bankrupt regain their lost fortune quickly. Your subconscious mind will set up your financial thermostat. Similar to a thermostat that controls the temperature of a room, your financial thermostat dictates your financial reality.
If you are serious about becoming financially free at retirement, you must first examine what financial files are stored in your subconscious mind. If you have the wrong data, you will continually have an adverse financial reality. That can easily result in you retiring poor, so give your self a mental checkup to see where you are.
Harv Eker sums it up appropriately when he says, “The only way to change the temperature in the room is to reset the thermostat.”
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Many people fail to realize the influence their reference group has on their destiny. Ziglar once said, “You can’t be flying with the eagles if you’re scratching with the turkeys.”
If you are serious about attaining financial freedom, it’s essential to surround yourself with smart advisers. At a very minimum, you need a dynamic accountant — equally, a banker who understands you and your business. You also need access to financially free people.
Learn from them, model them and imitate them, success always leaves clues. Learn from the people who retire rich and as well hear from the horse’s mouth – learn from the people that retire poor as well.
There is a common saying that goes, “Birds of a feather flock together,” so you can proactively begin today to choose to surround yourself with financially free people.
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If you ask people about their financial status, most will tell you they don’t want to talk or think about it. Many will tell you they will have a financial adviser or financial planner to handle their finances.
Unopened brown envelopes and bank statements are the two most frequently unopened letters in the world. The reason for this is that there is an inherent aversion within us to confront the brutal facts of our finances.
To supercharge your pursuit of financial freedom, it is instructive to handle your finances yourself and confront the brutal truth about them. One of the surest ways to retire poor is to avoid facing the truth about your finances.
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Many people will retire poor simply because they have no golden goose, and those that do frequently murder it in the name of immediate gratification.
Do you remember the fable of the Golden Goose? Long, long ago, this family came into possession of a goose that laid Golden Eggs. After some time, the family got greedy and killed the golden Goose to extricate more golden eggs. Sadly, by killing the Golden Goose, they also killed the producing mechanism for their income.
If there is ever a habit that everyone should adopt, it should be the habit of saving. Sadly, millions of people find one excuse or the other not to save. Without saving, your financial dreams might be in a faraway land.
Pay yourself first!
In his classic book, ‘The Richest Man In Babylon,” George S. Classons advises that we should pay ourselves first. Even though there will be hundreds of excuses for not doing it, that might be the most significant step you will take towards attaining financial freedom.
How often do you see workers buying new cars or moving to an expensive neighborhood when they received a pay raise? People who could not delay gratifications will most likely retire poor.
Related: Seniors, these 12 retirement mistakes could cost you big
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“Compound growth is the eighth wonder of the world” – Albert Einstein.
Compound interest can make or break you financially. In fact, it can make your life merry or miserable.
Why?
Compound interest can grow your wealth tremendously and as well increase your debt incredibly.
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Usually, income is manifested in three ways;
- Earned income – This is the income that generally comes in as paycheck or a salary for a product or service rendered.
- Portfolio income – This represents income derived from stocks, shares, investments, and pensions.
- Passive income -This is income that comes without you having to work full time for it. An example would be rental income, royalties, patents, online products, or services.
In his excellent book “Retire Young Retire Rich,” Robert Kiyosaki suggests that earned income is the worst source of income for several reasons. Firstly, it’s the highest taxed income. Secondly, you have to work hard for it, and it absorbs all your valuable free time. Thirdly, there is limited leverage in it in that the only way to earn more is to work longer and harder. Finally, there is precious little residual value in this income in that each day you have to start afresh again.
A significant difference in mindset between rich and poor is that rich people have money work for them as opposed to working for money. This is the true path to financial freedom.
If you want to retire poor keep working for money without an alternative source of income.
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It’s said that knowledge is power. If that’s true, only a few are ready to pay the price to acquire that knowledge. Poor people are the set of people with the worst reading habit. They find it challenging to invest in financial education.
Without a solid financial education, the attainment of financial freedom will be a very rigorous task. As the saying goes, “Life is tough, but you can make it tougher by been stupid.”Attaining financial freedom takes hard work. You can make it tougher by being financially ignorant.
It is vital to acquire and sharpen your financial skills to be financially free. Luckily, with the advent of the internet, the acquisition of knowledge has become infinitely more accessible. There are no excuses now.
To generate a steady, safe and consistent income from investing, you will need to acquire good financial knowledge and sharpen your skills with good practice over time. The knowledge acquisition process can be through books, financial games or through seminars and business coaches.
It is straightforward for employees to acquire more practical skills and knowledge than to gain financial knowledge. This is what keeps most people in the rat race and retiring poor.
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There are a lot of differences in the strategies used by all of the great investors. However, they all have two things in common: they all had a plan, and they stick to it. It is imperative to have a plan for how you are going to attain financial freedom.
Your quest will be doomed without a plan. Planning is essential. Even a bad plan is far better than no plan at all. (At least you know it’s terrible, and you can work on it to make it better).
Most people never map out a plan for their retirement, and the most significant percentage of those that do, do it too late. To avoid retiring poor, you need a plan early in your carrier, one that will take you to your financial destination.
You can study the strategies of great investors and choose the one that appeals to you. It’s imperative you stick with it. Consistency of purpose and practice is what ultimately wins out in generating ongoing profits.
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In their excellent book, “The Millionaire Next Door,” Tom Stanley and William Danko highlight how two families, living in the same type of house and employed in the same job, end up with totally different financial scenarios. By their late 40s, one is financially free. The other is deep in debt and despair.
The reason is not education, opportunity, or lucky breaks. It’s straightforward; it’s a matter of choice. To retire rich or retire poor is a choice, and nobody can make such a decision for you.
You have yet another chance today to choose the path you want to follow, so, choose wisely.
This article originally appeared on YourMoneyGeek.com and was syndicated by MediaFeed.org.
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