Is expat retirement under threat from the ageing world population?

For decades, living a carefree retirement overseas was the aim of would-be expats in the Western world, but recent developments would seem to be conspiring to turn the dream into a nightmare.

The changes taking place in the modern world have shaken the expat retirement ethic to its roots with threats to its stability, affordability and practicality. In addition, pressures on world countries attempting to cope with ageing societies are threatening pensions as well as healthcare and support. Security in retirement, whether it’s in the home country or in a chosen expat haven overseas, depends on society’s response to questions such as wealth inequality, income, affordable healthcare, safety and environmental quality, and is based on the stability of worldwide financial systems.

Average life expectancy across the world is 72 years at present, but is expected to be as high as 100 for millenials born in or around the year 2000. The modern emphasis on healthy living and eating as well as advances in medical treatments are expected to result not just in longer lives, but also in better health in old age. In the coming decades, the elderly are expected to be able to enjoy more active lives than in the past, and all first world governments will be faced with the costs of maintaining their older citizens as well as those who’ve arrived as expat retirees.

In the future, global retirement security is due to become a huge problem for favourite expat destinations, especially as today’s low interest rates mean older workers must stay in work for longer in order to save enough for their retirement years. If nothing changes, many will be tempted to accept high-risk investments in order to finance their expat lives, with many losing their pension pots as a result. It’s no surprise that a recent survey revealed Switzerland, Iceland, Sweden and Norway as the best countries for older expats as regards healthcare and quality of life, but all would be unaffordable for the average expat pensioner.

Affordable countries such as Spain, France, Portugal and a number of Asian destinations which, up to now, have accepted elderly incomers as long-term residents, won’t be immune to the effects of their own ageing population and its strain on amenities such as healthcare and housing. An influx of expat pensioners may not be as welcome as in the past, raising the possibility that retirement visas may be more difficult to get due to increased requirements as regards pensions and capital. However inexpensive a destination’s cost of living is, if immigration is financially blocked, elderly expats may be left with nowhere to live their retirement dream.