The pension system in Luxembourg is based on three pillars:
- The statutory pension
- The supplementary pension paid by the employer (optional)
- The supplementary pension built up personally (optional)
The granting and amount of statutory pensions in Luxembourg take three criteria into account:
• Age: the legal retirement age is 65. But early retirement is possible at 57 or 60 under certain conditions.
• The period of professional activity during which you have paid contributions (called “stage”): 120 months minimum within the European Union, Switzerland, Liechtenstein, Norway and/or Iceland (including at least one year in the Grand Duchy).
A forty-year stage must be proven in order to benefit from a full pension.
• Income received during the stage.
Your employer can elect to offer you a pension scheme which supplements the statutory State retirement pension.
To avoid risking a drop in your standard of living when you retire, you are strongly advised to take out retirement insurance from a private Insurance Company like AXA. This will supplement the statutory pension and the employer's pension scheme.
In addition, these products are tax-deductible (Art. 111bis LIR – Luxembourg Income Tax Law), provided that they are taken out for a minimum of ten years (more information on our Taxation page).