- The first pillar (mandatory), managed by the national pension insurance fund (CNAP), corresponds to the statutory pension financed by social security contributions.
- The second pillar, optional, is made up of the supplementary pension scheme set up by the employer. It serves to supplement the statutory pension with additional contributions benefiting from tax advantages.
- Finally, the third pillar represents individual retirement savings, such as the supplementary pension scheme contract, which allows you to build up additional capital while benefiting from annual tax deductions of up to 3,200 euros per taxpayer.
The national pension insurance fund (“Caisse nationale d'assurance pension”, or CNAP) is the organisation responsible for managing pensions in Luxembourg. It manages old-age, disability and survivors' pensions.
The CNAP takes care of:
- Calculating and paying pensions.
- Reviewing early retirement requests.
- Making decisions based on the contribution period and the country of residence of the insured person.
The Luxembourg system establishes the pension amount based on the number of years of contributions and the amount of salaries received.
The national pension insurance fund (CNAP) will provide you with an estimation service as of the age of 55.
You can also test our online pension simulation tool.
What is the minimum pension in Luxembourg?
The minimum pension amount as of 1 January 2025 is EUR 2,293.55* and cannot exceed a maximum of 5 times the minimum reference wage. This amount is regularly revalued to take into account changes in the cost of living.
* Source https://cnap.public.lu/fr/pensions/pension-vieillesse-65/pension-vieillesse-651.html
The legal retirement age is 65. This rule applies to all employees and self-employed workers exercising a professional activity in the Grand Duchy.
However, to claim a pension paid by Luxembourg, you must provide proof of at least 120 months of insurance with the national pension insurance fund (CNAP).
It is possible to take early retirement from the age of 57 or 60 depending on your situation and your years of contributions.
Early old-age pension is possible at two different ages, depending on your insurance periods. At 57, you must have 480 months of compulsory insurance, i.e. 40 years of actual contributions in Luxembourg.
As of the age of 60, the conditions become more flexible with a minimum of 480 months for all periods combined, including at least 120 months of compulsory, continued, optional or retroactive purchase insurance.
During the period of your early retirement and up to the age of 65, you can exercise a professional activity within certain limits. Your monthly income must not exceed one third of the minimum social wage to avoid a reduction in your benefits. Beyond this ceiling, the amount of your pension will be adjusted according to your new income.
Yes, your Luxembourg pension can be paid abroad. However, certain steps must be taken to ensure continuity of payments and the proper updating of your situation:
- You must inform the CNAP of your change of residence.
- The CNAP will regularly request a certificate of life to verify that you are still entitled to receive your pension.
To be entitled to a Luxembourg state pension, you must have contributed for at least 10 years, totalling the insurance periods completed in Luxembourg and, where applicable, in other countries of the European Union or having an agreement with Luxembourg.
If you have contributed for less than 10 years, your periods of work in Luxembourg will be taken into account for the calculation of pension rights by the other countries concerned, but you will not receive a separate pension from the state of Luxembourg.
Cross-border workers benefit from the same pension rights as Luxembourg residents. The CNAP takes into account all periods of contributions in the Member States of the European Union for the opening of pension rights.
You must submit your pension application to the pension body in your place of residence, several months before your desired retirement date. Your national body will coordinate with the CNAP in Luxembourg.
If you have worked in several member countries of the European Union, you will receive a partial pension from each country. The amount of this pension and the age at which it can be received will be calculated according to the rules in force in each country concerned.
To be entitled to a Luxembourg pension, you must have contributed for at least one year in Luxembourg and have at least ten years of total contributions (including periods worked in other countries of the European Union).
The amount of your pension is insufficient to maintain your standard of living. In addition, Luxembourg is not immune to reforms of the current pension system. It is therefore necessary to provide additional income to compensate for the future shortfall. How can you ensure that you have sufficient income when you retire?
Several solutions can be considered:
- A pension savings life insurance contract: the supplementary pension scheme contract is part of pillar 3, it allows you to build up capital or an annuity for retirement while benefiting from tax deductions.
- Life insurance: life insurance contracts remain very good long-term tools. They allow you to build up savings for retirement while also planning for your estate, and can even benefit from tax deductions under certain conditions.
- Financial investments: You may want to consider investing in financial markets. If you invest for the long term, you could benefit from the markets' high return potential and a compounding effect and protect these assets from inflation. Speak to your trusted financial advisor to learn more.
- Rental property: acquiring one or more properties to collect regular rents is also a way to generate additional income.
- Owning your main home: this is a major advantage for preparing for retirement because it allows you to reduce your monthly expenses once the loan has been repaid. It is preferable to become a homeowner early enough before retirement for the loan to be paid off by the time you stop working.
Preparing for retirement in Luxembourg is not just a question of age and contributions. It is also about anticipating your financial needs, understanding your social rights and considering suitable savings solutions. It is becoming essential to start as early as possible. Take the time to consult a trusted financial advisor or discover our savings solutions to optimise your strategy and ensure a peaceful retirement.