How does Germany’s retirement age compare to the rest of Europe?
2023 is a critical year for the German pension system – with more people leaving the workforce than entering it. The current German retirement age is 65 – for now. Just how does that compare with the rest of the continent?
When they signed their coalition agreement in late 2021, Germany’s federal traffic light parties promised not to raise the retirement age any further. Currently at 65, but set to go up to 67 by 2031, the government is pushing back on calls from employer associations and industry groups to raise the retirement age to 70.
But with one government expert commission warning that – if no reforms are made - pensions will eat up 44 percent of the state budget by 2040, Chancellor Olaf Scholz is still trying to discourage people from retiring early – an option available in the German system.
READ ALSO: Why 2023 is a critical year for Germany’s retirement system
So what do retirement ages look like in Europe and other western countries?
Germany sits in the middle of the European pack when it comes to retirement age. 65 years and 7 months is the standard age at which someone in Germany can retire, but some schemes allow people retiring here to take out less money on their pensions in exchange for retiring early. The standard age is slightly about the OECD and EU averages of 64.
People in France and Italy, for instance, can retire earlier than people in Germany, whereas the standard retirement age in Iceland is already 67. Here’s an overview, according to OECD numbers from 2020:
- Germany – 65.7 years (standard), 63.7 (early)
- Austria – 65 for men (standard), 62 for men (early), 60 for women (both)
- Denmark – Depends on insurance, 65.5 in most cases
- Spain – 65 (standard), 63 (early)
- France – 63.5 (standard), 62 early in most cases. Can be as low as 55 in some cases.
- Greece – 62
- Ireland – 66
- Iceland – 67
- Italy – 62
- Norway – 67 (standard), 62 (early, available under certain plans)
- The Netherlands – 66 years and 2 months
- Poland – 65 for men and 60 for women
- UK – 66
- Sweden – 65 (standard), 62 (early, although some schemes allow even earlier retirement)
- Switzerland – 65 for men (standard), 64 for women (standard), 63 for men (early), 62 for women (early) – although some schemes allow retirement for both men and women at 58.
- Australia – 66
- New Zealand – 65
- Canada – 65
- United States – 66 (standard), 62 (early)
READ ALSO: How long do you have to work to receive a German pension?
Who is raising their retirement age?
The EU average retirement age is set to go up by about two years to 66 by 2060. Most OECD countries are either raising or holding theirs at 65 for the time being, with only Slovenia and Luxembourg holding theirs at the low end of 62. France in particular is going through a lot of pushback on raising theirs.
Germany and Belgium plan to raise theirs to 67, while Portugal and Finland will hike it to 68 and the Netherlands to 69. Estonia, Italy, and Denmark all plan to break the 70 barrier, with Estonia and Italy planning to raise it to 71 and Denmark to 74 years of age.
READ ALSO: Will Germany raise the pension age to tackle its worker shortage?
How much do you put in and how much do you get?
In general, workers taking pension in Germany get 48 percent of their leaving salary, which is adjusted based on when they’ve retired. Those who’ve retired early will get less, down to a legal minimum of 43 percent. Those who choose to retire later will take home more.
That’s quite a bit less than the OECD average of 58 percent. People in Spain come out on top by getting 82 percent of their leaving salary. France also has a comparatively generous state pension scheme of 74 percent of leaving salary.
The UK fares the worst at 28 percent – although many there have private pensions on top of the state ones.
Employed people in Germany contribute 9.8 percent of their monthly income to their pension, with the employer paying the other half for a total of 18.6 percent.
That’s less than the employee’s share in France (11.2 percent) and much less than the Netherlands (18 percent).
French pensioners on average get a good deal at present, with a higher proportion of their leaving salary and a lower pensioner poverty rate compared to their German counterparts. Photo: AFP
Is it enough to live on?
Germany has one of the higher rates of pensioners living in poverty in Europe – at 20 percent. That’s higher than the UK (17 percent) and over double that same figure for France (9.5 percent).
With life expectancy having rise in Germany in recent years, the average pensioner can expect to spend an average of 20 years in retirement.
READ ALSO: When are people in Germany retiring?
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When they signed their coalition agreement in late 2021, Germany’s federal traffic light parties promised not to raise the retirement age any further. Currently at 65, but set to go up to 67 by 2031, the government is pushing back on calls from employer associations and industry groups to raise the retirement age to 70.
But with one government expert commission warning that – if no reforms are made - pensions will eat up 44 percent of the state budget by 2040, Chancellor Olaf Scholz is still trying to discourage people from retiring early – an option available in the German system.
READ ALSO: Why 2023 is a critical year for Germany’s retirement system
So what do retirement ages look like in Europe and other western countries?
Germany sits in the middle of the European pack when it comes to retirement age. 65 years and 7 months is the standard age at which someone in Germany can retire, but some schemes allow people retiring here to take out less money on their pensions in exchange for retiring early. The standard age is slightly about the OECD and EU averages of 64.
People in France and Italy, for instance, can retire earlier than people in Germany, whereas the standard retirement age in Iceland is already 67. Here’s an overview, according to OECD numbers from 2020:
- Germany – 65.7 years (standard), 63.7 (early)
- Austria – 65 for men (standard), 62 for men (early), 60 for women (both)
- Denmark – Depends on insurance, 65.5 in most cases
- Spain – 65 (standard), 63 (early)
- France – 63.5 (standard), 62 early in most cases. Can be as low as 55 in some cases.
- Greece – 62
- Ireland – 66
- Iceland – 67
- Italy – 62
- Norway – 67 (standard), 62 (early, available under certain plans)
- The Netherlands – 66 years and 2 months
- Poland – 65 for men and 60 for women
- UK – 66
- Sweden – 65 (standard), 62 (early, although some schemes allow even earlier retirement)
- Switzerland – 65 for men (standard), 64 for women (standard), 63 for men (early), 62 for women (early) – although some schemes allow retirement for both men and women at 58.
- Australia – 66
- New Zealand – 65
- Canada – 65
- United States – 66 (standard), 62 (early)
READ ALSO: How long do you have to work to receive a German pension?
Who is raising their retirement age?
The EU average retirement age is set to go up by about two years to 66 by 2060. Most OECD countries are either raising or holding theirs at 65 for the time being, with only Slovenia and Luxembourg holding theirs at the low end of 62. France in particular is going through a lot of pushback on raising theirs.
Germany and Belgium plan to raise theirs to 67, while Portugal and Finland will hike it to 68 and the Netherlands to 69. Estonia, Italy, and Denmark all plan to break the 70 barrier, with Estonia and Italy planning to raise it to 71 and Denmark to 74 years of age.
READ ALSO: Will Germany raise the pension age to tackle its worker shortage?
How much do you put in and how much do you get?
In general, workers taking pension in Germany get 48 percent of their leaving salary, which is adjusted based on when they’ve retired. Those who’ve retired early will get less, down to a legal minimum of 43 percent. Those who choose to retire later will take home more.
That’s quite a bit less than the OECD average of 58 percent. People in Spain come out on top by getting 82 percent of their leaving salary. France also has a comparatively generous state pension scheme of 74 percent of leaving salary.
The UK fares the worst at 28 percent – although many there have private pensions on top of the state ones.
Employed people in Germany contribute 9.8 percent of their monthly income to their pension, with the employer paying the other half for a total of 18.6 percent.
That’s less than the employee’s share in France (11.2 percent) and much less than the Netherlands (18 percent).
Is it enough to live on?
Germany has one of the higher rates of pensioners living in poverty in Europe – at 20 percent. That’s higher than the UK (17 percent) and over double that same figure for France (9.5 percent).
With life expectancy having rise in Germany in recent years, the average pensioner can expect to spend an average of 20 years in retirement.
READ ALSO: When are people in Germany retiring?
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