Retirement and old-age pensions

Taking your retirement pension in Luxembourg

Did you know that Luxembourg is one of the top 10 countries in the world in terms of old-age pensions? So how do pensions work in Luxembourg, who can benefit and how?

Who can claim an old-age pension in Luxembourg?

Social contributions and pillars for old-age pensions in Luxembourg

All employees and self-employed workers in Luxembourg contribute 8% of their monthly salary to a national old-age pension fund. The employer also contributes the same amount on behalf of the employee.

These employee and employer contributions go into the employee pension fund and form the first pillar of old-age pensions.

The second pension pillar is financed by company pension plans .These represent an attractivebenefit-in-kind for employees, significantly increasing the amount of their retirement pension.

The third pillar of old-age pension contributions is individual pension provision, through capitalization savings offered by banks and insurance companies.

If you voluntarily contribute to this third pillar via a private pension plan, you can deduct your pension insurance contributions from your taxable income.

Retirement conditions and pension payments

Employees or self-employed workers may be entitled to retirement and old-age pension benefits in Luxembourg, provided they meet a number of conditions:

  • Have reached the legal retirement age in Luxembourg (65)
  • Have paid pension insurance contributions for at least 120 months of their working life. These contribution periods, known as "stages", may be compulsory (articles 170, 171, 172 of the Social Security Code), continuous (article 173), optional (article 173 bis) or retroactive (article 174).
  • Have worked in Luxembourg for at least 12 months

The 10 years of contributions may have been made in Luxembourg, but also in any of the EU countries or in other countries that have signed a social security agreement with Luxembourg.

The years of study (up to 9 years) completed between the ages of 18 and 27, in Luxembourg or abroad, can be taken into account to reach the number of years required to trigger retirement. Beware, however, of the final amount of the old-age pension paid, as these years are not contributory!

Old-age pensions will be paid into your bank account.

Benefiting from an early retirement pension in Luxembourg

In Luxembourg, it is possible to benefit from an early retirement pension:

  • from the age of 57, provided the insured has paid 480 months of compulsory insurance contributions
  • or from age 60, subject to 480 months of insurance contributions, including 120 months of compulsory, continuous or optional insurance, or retroactive purchase.

To find out more about old-age insurance contributions, see the Luxembourg Social Security Code.

Claiming and calculating a pension in your country of residence

Applicants for an old-age pension must apply to the pension fund in their country of residence. This application must be made a few months before retirement age.

The country of residence then calculates pension entitlements in accordance with its own legislation and that of the country or countries where the insured has made contributions, based on European or bilateral agreements. The insured will receive benefits from each country where he/she has contributed, in accordance with the legislation of each of these countries.

If, at retirement age, the applicant does not meet the conditions for contributions to Luxembourg old-age insurance as defined above, he/she may request reimbursement of the contributions he/she would have paid in Luxembourg (less the employer's share). In this case, the applicant loses the right to any Luxembourg pension.

To find out more about old-age pensions in Luxembourg and how to apply for them, visit the Caisse Nationale d'Assurance Pension website.

There is no official Luxembourg pension simulator. However, you can get a more or less accurate idea, thanks to the following pension simulators:

A request for a pension calculation can be made to the CNAP from the age of 55.

Some figures on retirement pensions in Luxembourg

Retirement pensions in Luxembourg are relatively high compared to other European countries.

On September 1, 2023, the minimum pension received for 40 years' contributions in Luxembourg will be 2,219.63 euros gross.
There is a ceiling on the maximum amount . In 2022, the maximum pension is 9,422.19 euros.

Pensions are also index-linked. Their amount is automatically readjusted when the index is triggered.

Those who have not spent their entire career in Luxembourg receive an average of 1,280.40 euros per month. Pensions from other countries in which they have worked are added to this amount.

In view of the changing economic situation and labor market, it would appear essential to reform Luxembourg's pension system in the near future. Balanced today, it is likely to be in deficit by 2027. This is a key issue for the government.

Part-time work, self-employment and pension insurance

In Luxembourg, part-time work and self-employment affect the length of contributions required for retirement.

A part-time worker must work a minimum of 64 hours per month for the month of work to count towards contributions.

A self-employed worker must work a minimum of 10 calendar days per month for the month to count towards his or her pension.

In order to retire at 60 at the earliest, a worker can buy back insurance periods in the following cases: 

  • the worker stopped working to take care of his family
  • the worker has paid contributions in a country which has not signed a social security agreement with Luxembourg.

Supplementary pensions in Luxembourg

To help you prepare for retirement, you can also take out a supplementary pension with an insurance company . By taking out this type of contract, you will receive an additional retirement benefit when you retire. You must have contributed for at least 10 years. This annuity will be paid to you at age 60 at the earliest, and at age 75 at the latest.

By contributing to a supplementary pension scheme, you benefit from tax deductions on your taxable income of up to 3,200 euros per year.

Workers who have paid compulsory pension contributions for 12 months in the 3 years preceding their disaffiliation may also opt for continued insurance until they find another job. The request must be made to the CCSS - Centre Commun de la Sécurité Sociale within 6 months of the end of compulsory contributions.

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