Expected retirement age

Updated: 7 Apr 2021
Next update: 1 Apr 2022

The expected effective retirement age depicts the average expected age of actual retirement that is formed for insured persons of a certain age, when presuming that starting pensions for a certain age group and mortality rates remain at the level of the year under review. The expected effective retirement age is calculated both for 25-year-olds and 50-year-olds. The indicator was introduced in 2003.

The prediction can be used to review, in particular, changes in the effective retirement age occurring over time. The indicator reacts immediately and in the right direction to changes in retirement risk. Change is followed up primarily through the expected effective retirement age for 25-year-olds, since it describes the entire population covered by earnings-related pension insurance.

The expectancy describes the development in the effective retirement age for the whole population insured for the earnings-related benefits, and it is used as the official indicator to describe the changes in the effective retirement age.

The expected effective retirement age of 50-year-olds is calculated due to the fact that pension policies have the greatest impact on those who have turned 50 years of age. Since persons who have retired under the age of 50 are not included in the calculation, the expectancy for a 50-year-old is always higher than that of a 25-year-old. The difference depicts the impact that retirees between the ages of 25-49 have on the effective retirement age. Annually, approximately 10 per cent of those who retire are aged less than 50 years.

   

Effective retirement age rose briskly

In 2020, the expected effective retirement age in the earnings-related pension scheme was 61.9 years. The effective retirement age rose exceptionally much in 2020. This increased the effective retirement age by five months compared to in 2019.

Changes in the effective retirement age are measured by the expected effective retirement age, which is based on pension contingencies in different age cohorts.

In 2020, the expected effective retirement age for 25-year-old men and women was 62.3 and 61.6 years respectively.

In 2020, approximately 61,000 persons retired on an earnings-related pension. Of them, 42,000 persons (69%) retired on an old-age pension, down by 2,000 persons (5%) from 2019.

The amount of new retirees on a disability pension declined by more than 1,000 persons compared with 2019. Around 19,000 persons retired on a disability pension, which was 6 per cent less than in 2019.