Here is a complete guide to the retirement/pension system in Luxembourg, including departure and entry conditions, amounts, specificities according to sectors of activity and provisions for cross-border commuters.
Retirement/pension age
Legal age
The legal retirement/pension age in Luxembourg is 65, provided that at least 120 months (10 years) of insurance periods (compulsory, continued, optional or retroactive purchase) are proven.
These periods may be cumulated with those completed in other countries of the European Union, the European Economic Area or Switzerland.
Early retirement
Two options are available for early retirement/pension:
- From age 57: requires 40 years (480 months) of compulsory insurance periods.
- From age 60: requires 40 years (480 months) of insurance periods, including at least 10 years (120 months) of compulsory, optional or retroactive insurance.
Pension amounts
Minimum pension
As of 1 January 2025, the minimum pension for a full career of 40 years is €2,293.55 gross per month.
Maximum pension
As of 1 January 2025, the maximum pension is capped at €10,618.30 gross per month.
Calculation of pension
The pension consists of:
- Flat-rate increase: depends on the length of the insurance career (actual and additional periods).
- Proportional increase: depends mainly on the wage bill accumulated during the career, with a rate of 1.85% per year of contribution.
- Years of education: completed between the ages of 18 and 27, they may be taken into account in calculating pensionable annuities.
Indexing
Pensions are cost-of-living adjusted and may be adjusted periodically based on the financial situation of the scheme to maintain the purchasing power of retirees.
Schemes by industry
General compulsory scheme (private sector)
The general scheme covers all employees in the private sector, the self-employed and employees with a private status in the public sector.
This scheme is financed on a pay-as-you-go basis, with an overall contribution rate of 24% broken down as follows:
- 8% to be paid by the employee,
- 8% to be paid by the employer,
- 8% to be paid by the state.
Contributions are used to fund current pensions, and a reserve is maintained to ensure the sustainability of the system.
Special scheme (public sector)
Public sector employees (State, municipalities, CFL) have special schemes:
- Special scheme: aligned with the general scheme with some differences, such as funding or the absence of maximum pensions.
- Special transitional scheme: for staff who entered into service before 1 January 1999, with specific rules for the calculation of pensions.
- Pension based on last salary and length of service.
The age limit is 65 with 10 years of service; an early retirement pension at 57 or a progressive retirement is possible.
Complementary schemes
- Supplementary pension schemes: set up by some companies for their employees. These schemes are optional and aim to supplement the benefits of the general scheme. Contributions can be financed by the employer, the employee or both and benefit from tax advantages.
- Individual retirement pension: subscribed on an individual basis, this retirement savings also benefits from tax advantages. It allows insured persons to save extra for their retirement.
And if you are wondering which sectors of activity are accepted at IT Family, check out our article on this subject!
Provisions for cross-border commuters
Cross-border workers (resident in France, Belgium or Germany) have the same pension rights as Luxembourg residents.
Eligibility requirements
- Have worked in Luxembourg for at least 1 year.
- Have accumulated at least 10 years of insurance periods in the European Union or in countries that have concluded a social security agreement with Luxembourg.
Early retirement
Cross-border commuters are entitled to early retirement on the same conditions as residents:
- From age 57: with 40 years (480 months) of compulsory insurance periods.
- From age 60: with 40 years (480 months) of insurance periods, including at least 10 years (120 months) of compulsory, optional or retroactive insurance.
Payment of pensions
In the case of a mixed career (Luxembourg and other countries), each country pays a pension proportional to the periods of insurance completed on its territory.
And for non-residents of Europe, find out how to get a visa to work in Luxembourg in our article.
Application and taxation
The pension application is not automatic. It is necessary to make this form with the Caisse Nationale d'Assurance Pension (CNAP) or the competent institution of your country of residence if you are non-resident. It is also recommended that you file your application several months before the planned retirement date.
Pensions are subject to:
- A health insurance contribution of 2.8%,
- A dependency insurance contribution of 1.4%,
- Income tax according to the graduated scale.
Comparison with other countries
Here is a comparison of the legal retirement/pension ages:
Country | Legal retirement / pension age | Minimum pension amount (gross monthly) | Conditions for obtaining the minimum |
Luxembourg | 65 | €2 293,55 | Full career (40 years) |
France | 64 (after 2023 reform) | €733,03 (MiCo) / €876,13 (MiCo increased) | Full rate with 120 contributed quarters |
Belgium | 65 | €1 773,35 (isolated) / €2 215,99 (household) | Full career (45 years) |
Germany | 67 | Variable according to contributions | No guaranteed minimum pension |
Advantages of the Luxembourg system
- High pension amounts compared to other European countries.
- Regular indexation to preserve purchasing power.
- Flexibility with early retirement.
- Taking into account periods of insurance in the EU, facilitating cross-border careers.
Discover other advantages of living in Luxembourg in our article!
And if you have any further question, please feel free to contact us!