Why The World’s Safest Country To Retire On A Budget Is Not So Ideal If You’re Still Working

For decades, Denmark has been ranked as one of the safest countries in the world to live in, making it a top choice for Americans searching for a comfortable place to retire. It’s also consistently mentioned as a top performer in happiness surveys due to its strong social welfare system and excellent healthcare.

And let’s not forget about an incredible climate that boasts mild summers and moderate winters, as well as a culture that promotes active lifestyles and healthy eating habits. Denmark’s capital, Copenhagen, is full of hidden gems that can’t be missed, while Aarhus is also a popular destination for foreigners, with countless activities and a welcoming vibe.

While Denmark is a great place to enjoy your golden years, it’s not such a great place to live for those who are still working. Let’s dive in and find out why.

What Makes Denmark So Good For Retirees?

Denmark is an ideal country to retire to

Outside of the exciting cities and one-of-a-kind experiences, there are several other factors that play a role in Denmark’s ability to attract foreign retirees and expats, like low living costs, a high quality of life, and a safe and clean environment.

Denmark’s crime rate saw no significant changes from 2022 and the country ranks among the lowest crime rates in the European Union, making it the safest country in the world to retire on a budget, with an average living cost below $2,000. But this begs the question: what makes the cost of living in Denmark so low?

The answer is easy. Free healthcare, education, and other essential services allow Denmark’s social system to reduce economic inequality by providing access to all of these things for everyone, regardless of race, background and income.

These services are all paid for by high taxes, which makes Denmark not as ideal a place to retire if you’re still working.

Why Working In One Of The Happiest Places On Earth Can Be A Challenge

Logistics, relocation costs, and government red tape

One of the biggest hurdles to overcome when relocating to Denmark is obtaining a work permit and visa, especially for Americans who aren’t considered EU citizens. For remote workers employed by companies in their native country, it can be much easier. But for those hoping to find work with a Danish company, things can get tricky.

First, jobseekers need to find a company that’s willing to sponsor them, then prove that no Danish citizen is available for the position. This scenario can be a challenge, and also involves applying through the Danish embassy prior to arriving.

Those who do land a job in this Scandinavian country enjoy a work-life balance unlike any other in the world, as Danes take advantage of shorter work days and generous vacation time.

However, there can be plenty of other challenges to overcome, such as language barriers. While English is widely spoken in Denmark, learning Danish can be instrumental in not only finding work, but being successful and properly integrating into the community.

Some of the most popular jobs for Americans working in Denmark include skilled trades such as carpenters and electricians. There are also many who work in IT, engineering, and teaching. In many sectors, Denmark has a labor shortage, so having the right skills can be extremely beneficial for those looking to relocate.

In addition to acquiring a visa, overcoming language barriers, and finding the perfect industry to work in, westerners will also face relocation costs in the form of high rent prices, expensive international moving services, insurance premiums for non-EU citizens, potential customs duties, and soaring taxes.

For entrepreneurs, on the other hand, Denmark is one of the countries that pay for you to move there, but rather than money, the country offers a 2-year residency and a permanent work permit.

High Taxes Make Denmark Not So Ideal To Relocate To If You Are Still Working

Great for retirement, but expensive for those still working

As previously mentioned, Denmark may very well be an idyllic place to live, but the country’s high quality of life is paid for with a relatively costly tax rate. Scandinavian countries have a long history of levying top personal income taxes on middle-class earners, not just high-income taxpayers.

In Denmark, the top statutory personal income tax rate is 55.9 percent, which applies to all income above 1.3 times the national average.

Compare this to the United States, with a top personal income tax rate of 43.7 percent for those making above $530,000 annually (8.5 times the average U.S. income), and it’s easy to see how Denmark’s taxes aren’t just more widely spread among its population, but also much higher for the middle-class.

For American expats living and working in Denmark, handling both US and Danish taxes can be particularly expensive. As a US citizen, expats must file US tax returns each year, regardless of where they live. And if those same people meet Denmark’s residency criteria, they’ll also be forced to pay into Denmark’s tax system.

However, Americans working remotely for American businesses often avoid Danish taxes due to the fact that their income isn’t sourced within Denmark. This seems to be a trendy loophole that many expats are taking advantage of.

While expats earning an income in Denmark may not be able to avoid paying double taxes, they can use the Foreign Earned Income Exclusion (FEIE) to lighten their tax burden and exclude a certain amount of foreign income from US taxation. In 2025, the maximum exclusion amount is set at $130,00.

It may be a lot to digest, but don’t let these costs scare you out of relocating to Denmark, where food, culture, and breathtaking landmarks await. Ultimately, it’s an amazing place to live, work, and raise a family. And if you’re earning under $130,000 in 2025, you may be able to avoid paying US taxes on that income altogether.

There is no shortage of reasons to make the move to Denmark—from quality of life and happiness to enchanting natural beauty and fascinating culture. And while there are challenges for those still in the workforce, many retired expats are thrilled to call Denmark “home”.

If you are looking to relocate to Denmark and are still working, your research ahead of time, calculate your projected taxes, understand residency laws and visa requirements, and your move to Denmark could turn out to be the adventure of a lifetime.