How to Retire in Denmark

If happiness is contagious, Denmark might be the perfect place to retire. Consistently ranked among the world’s happiest countries, Denmark offers a high quality of life supported by a strong social safety net, a deep appreciation for culture and an active, outdoor lifestyle. Its capital, Copenhagen, is renowned as the most bike-friendly city on the planet and is home to Tivoli Gardens, the world’s second-oldest amusement park, which has delighted visitors for over 175 years. If you’re you might want to retire in Denmark, there are several important factors to consider. Before making the move, be sure your finances are in order. Working with a financial advisor can also help you prepare with confidence.

Cost of Living and Housing in Denmark

Like its neighbors, the cost of living in Denmark is comparable to the U.S. Consumer prices are 8% higher than in the U.S., according to Numbeo, a cost-of-living database. However, when you factor in the cost of rent, total consumer prices are 6% lower than in the United States.

The average rental rate in the U.S. for a one-bedroom apartment in a city center is $1,740 per month, while in Denmark the same rental average is $1,151 per month. A three-bedroom rental in the same area would be over $2,900 per month in the U.S. and around $2,027 in Denmark.

Residence Permit to Retire in Denmark

If you’re planning to retire in Denmark, a simple tourist visa won’t be enough. For stays longer than three months, you’ll need to apply for a long-term visa. Denmark does not offer a dedicated retirement visa, so you’ll need to qualify under another category, typically as a student, worker or partner of a Danish citizen.

For most American retirees, the partner visa is the most accessible option. If you’re married to or in a long-term relationship with a Danish citizen, they may be able to sponsor your visa, making the application process more straightforward.

If you intend to work while living in Denmark, you’ll need to apply for a residence and work permit. This requires securing a job with a Danish employer willing to sponsor your application, along with submitting detailed information about your employment background and personal history. You can find all the requirements on the New to Denmark website.

Denmark Healthcare

According to the World Index of Healthcare Innovation, Denmark comes in at number 6. Meanwhile, the World Population Review ranks the health of Danes as the 16th healthiest in the world.

Denmark’s healthcare system is universal and decentralized, with funding provided by the government through tax revenues distributed to regions and municipalities. This ensures that healthcare services are accessible across the country. However, individuals who do not pay taxes in Denmark are not automatically enrolled in the system. They must rely on private insurance or pay out of pocket for medical care.

Foreign nationals staying in Denmark for more than three months may be eligible for public healthcare under the Danish Health Security Act. To qualify, they must register with Citizens’ Services and obtain a CPR number (Det Centrale Personregister). If someone does not yet have a CPR number due to their visa status, they can still receive medical treatment, provided they have valid health insurance from their home country or are able to cover the cost of care themselves.

Taxes in Denmark

If you can get a work or partner visa in Denmark, you will be taxed on your income from Denmark sources. Your tax rate will range from 8% to 56%, depending on your income.

Denmark also has a sales tax on items that can reach 25%. This is known as a value-added tax (VAT). Additionally, capital gains taxes on investments in Denmark can be taxed between 27% and 42% of the gains. This includes bought and sold properties at a higher value. This is higher than most taxes in the U.S.

Additionally, American citizens are required to file expatriate tax returns annually. Your income earned in Denmark may be subject to tax, so be sure to work closely with an accountant or other financial professional to learn about the Foreign Earned Income Exclusion and other potential tax credits.

How Safe Is Denmark?

In a global analysis of nations in which residents felt safe walking home, Denmark got the fifth highest score. And in the same study’s Law and Order Survey, Denmark got the sixth highest score. According to the U.S. Department of State, Copenhagen is a medium-threat location for crime.

Not only is crime significantly lower than in the U.S., but the superior public healthcare system is also widespread. Therefore, if someone is injured in physical activity or otherwise, excellent healthcare will always be available to citizens and foreign nationals.

Bottom Line

Denmark checks a lot of boxes for outsiders seeking a retirement home. The social safety net is about as strong as exists anywhere. Expats will find the country safe and full of encouragement to ride a bike, enjoy a beach, hike a centuries-old path through a conifer forest or hunker down on a cold evening to savor hot mulled wine – all with some of the world’s happiest people. They might even help you pronounce difficult Danish phrases (try saying “red porridge” in their language). The combined effect of these distinctly Danish pleasures is sometimes called “hygge,” a term that evokes international admiration.

Tips on Affording Retirement

Consider talking to a financial advisor about retiring overseas if you’re looking for help in getting your finances in order. Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Retiring in Denmark has many intricacies. In general, it’s more expensive than in the U.S. But your Social Security and, if you have it, a pension could cover the costs. You can estimate your benefit amount with this Social Security calculator.