government

Countries where retirees get the most government cash

December 3, 2020
iwano@_84

Nations looking after their retirees financially

After decades of hard work, many look forward to the golden years of retirement. But which countries best look after the financial needs of their older populations? Click or scroll through to see the 31 countries where senior citizens receive the best pensions, according to the Mercer CFA Institute Global Pension Index 2020, which ranks both government and private pension systems on their adequacy, sustainability and integrity. Basic pension data is taken from the most recent OECD data unless otherwise stated. All dollar values in US dollars unless otherwise stated.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

31st: South Korea

South Korea’s state pension scheme is contribution-based, and is typically available after 40 years of contributions. The resulting pension takes into account both individual earnings as well as wage growth and prices. Currently South Koreans can receive their full pension from the age of 62, or a reduced amount from the age of 57. However, the age for the full benefit is set to increase to 65 from 2033, and the early benefit age will also increase to 60. Anyone aged over 65 who earns less than 375,000 South Korean won each month ($336/£253) (including from their national pension) will also receive a targeted ‘basic’ pension which has a maximum benefit of 250,000 won ($224/£169) per month.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

30th: Indonesia

Indonesia’s government pension scheme is a system funded through employer and employee contributions, which are a fixed percentage of a person’s monthly salary. After contributing to the scheme for 15 years or more, the minimum pension is 331,000 Indonesian rupiah ($23.36/£17.51) per month, and the maximum is 3.97 million rupiah ($280/£210) each month. For those who contributed for less than 15 years a lump sum is available instead. Indonesians can take their pension from the age of 57, but this is set to rise by one year every three years until it reaches the age of 65 by 2043.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

29th: Italy

Italian workers pay into a defined contribution system and there’s also a state social assistance benefit that’s means-tested. People who receive less than €507.42 ($602/£453) per month from the contribution-based system are entitled to a minimum government pension supplement. This additional money goes towards ensuring that people have a minimum of €6,596.46 ($7.8k/£5.9k) of pension income each year. As of January 2019, the pension age is 67 years old as long as you have contributed for 20 years. An early welfare-based retirement benefit is available from the age of 63, but only for women who have made 41 years of contributions and men who have made 42 years.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

28th: Austria

Austria’s government offers a defined benefit public scheme with a top-up option for pensioners with a low income. Pensions are typically earnings-based, but if a person’s pension benefit and other income sources amount to less than €909.42 ($1.1k/£813) a month, or €1,363.52 ($1.6k/£1.2k) for couples, then they are entitled to additional money from the government. In 2017, further top-up measures were introduced to ensure that Austrians are well looked-after in their golden years. Currently, women can retire at 60 and men at 65, although the age for women is set to increase to 65 by 2033.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

27th: South Africa

South Africa offers a means-tested public pension. A single person can receive a pension benefit of up to 1,600 rand ($104/£78) per month if they have an income of less than 73,800 South African rand ($4.8k/£3.6k) and less than 1.056 million rand ($68.8k/£51.8k) in assets. The pension allowance is increased to 1,620 rand ($106/£79) per month for those over 75 years old. The retirement age for both men and women in South Africa is 60 years old.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

26th: Brazil

A pay-as-you-go social security system is the backbone of Brazilians’ retirement income. State pension is based on 80% of earnings and contribution period or life expectancy, with a minimum payment of 954 Brazilian real ($177.30/£132.57) a month and a maximum payment of 5,645.80 real ($1,049/£785). The Brazilian Government initiated an overhaul of its pension system in 2019, including a minimum retirement age of 65 for men and 62 for women to prevent people from retiring early. 



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

25th: Poland

Poland’s state pension has changed considerably over the last 20 years, and the latest system, which applies to people born after 1968, is made up of a minimum public pension and an earnings-related system. As of March 2018, the minimum monthly old-age pension was 1,029.80 złotys ($274/£205) and the base amount is 3,731.13 złotys ($993/£742), according to the Social Security Office of Retirement and Disability Policy. Men can retire at 65, and women at 60. Those aged over 75 may also qualify for a nursing allowance if they need care.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

24th: Peru

In Peru, there is a means-tested government pension paid to those in need, and a pay-as-you-go defined benefit public scheme. Employers do not have to contribute to their workers’ pensions, but voluntary contributions are allowed. The minimum retirement income per month is 415 soles ($116/£87) and the maximum is 857.36 soles ($240/£179), according to the most recent Social Security Office of Retirement and Disability Policy data. 



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

23rd: Saudi Arabia

Saudi Arabia’s retirement system is an earnings-related pension, or a lump sum payout for those who don’t qualify. The earnings-based pension amount reflects 2.5% of an insured person’s average monthly earnings during the last two years of contributions. The minimum pension in Saudi Arabia is 1,984 Saudi riyals ($529/£396) per month.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

22nd: Spain

Spain offers an earnings-related public pension system and a minimum means-tested social assistance benefit. From the age of 65, the minimum pension benefit for a single person is €657.60 ($782/£586) each month and the maximum is €2,617.53 ($3.1k/£2.3k) each month, with 14 installments in the year. By 2027 the retirement age for men and women will have increased to 67.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

21st: Colombia

Similar to neighbouring Peru, Colombia has a means-tested pension for those in need, and a pay-as-you-go defined benefit plan. As of 2017, the minimum social insurance old-age pension is the equivalent of the legal minimum wage, which is 737,717 Colombian pesos ($203/£152), according to the Social Security Office of Retirement and Disability Policy. 



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

20th: France

France has an earnings-related public pension with a mandatory occupational pension plan for blue- and white-collar workers. The minimum pension given to those who are entitled to a full-rate pension but had a low income while paying contributions comes to €636.56 ($758/£567) each month, according to liaison body Cleiss. When combined with other supplements such as insurance, the basic personal pension cannot surpass €1,191.57 ($1,418/£1,061). In France you can currently retire at 62, but you are encouraged to work longer than this and will receive more state benefits when you do retire if you do. The retirement age is set to increase to 67 by 2023.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

19th: Malaysia

In Malaysia, the Employee Provident Fund (EPF) covers all private sector employees and non-pensionable public sector workers. The EPF doesn’t exclusively provide retirement income, and some benefits, such as a withdrawal for leaving the country or for education, can be taken at any time. Members of the fund have different options for accessing their pension, including an anytime payment of at least 2,000 Malaysian ringgits ($489/£366) in a month, and a monthly payment of at least 250 ringgits ($61/£46) for a minimum of one year, according to the most recent data from the Social Security Office of Retirement and Disability Policy. There is also a non-contributory old-age pension of 350 ringgits ($86/£64) per month, which is means-tested.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

18th: US

America’s social security system uses a benefit formula based on lifetime earnings, adjusted for inflation, as well as a means-tested top-up payment for low-income retirees. The most a person can receive per month varies from $2,265-$3,790 (£1,700-£2,840), depending on their age. The full retirement age in the US is currently around 66 years, but it depends on the year you were born.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

17th: Hong Kong

In Hong Kong, employers and most employees are required to make monthly contributions of 5% of income to the retirement protection system, the Mandatory Provident Fund (MPF). Additional voluntary contributions are also permitted. Retirees can withdraw their MPF money either as a lump sum or through installments, but also have the option to leave the money in the fund as a continuous investment. There is also a basic old-age allowance of HK$2,495 ($322/£240) per month for anybody aged between 65 and 69 years old who has a monthly income of less than HK$7,580 ($978/£730) and assets adding up to less than HK$219,000 ($28.2k/£21.1k). For those aged 70 or above, the flat allowance rate is HK$1,290 ($166/£124) per month. The retirement age is currently 65.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

16th: Belgium

In Belgium, the government scheme is earnings-related with a means-tested safety net. The earnings-related pension is calculated at 60%, or 75% if the individual has a dependent spouse, based on average lifetime pay. However, to receive the full amount you have to have worked for 45 years. The means-tested safety net called GRAPA (Garantie de revenu aux personnes âgées) amounts to between €12,999 and €13,421 ($15.5k-$16k/£11.5k-£12k) a year for people living alone, and €8,947 ($10.6k/£8k) for individuals sharing a household. 



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

15th: United Kingdom

Retirees in the UK have access to a single-tier state pension supported by an income-tested pension credit. People reaching the state pension age of 66 are eligible for the full state pension of £175.20 ($232.77) per week if they have paid National Insurance contributions for 10 years over their lifetime. The age at which people can take their pension is set to rise to 67 between 2026 and 2028, and is likely to increase again after that. 



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

14th: Ireland

In Ireland there is a flat-rate basic social security scheme and a means-tested benefit for individuals who haven’t made sufficient social insurance contributions. The basic pension allowance depends on how many years you have paid PRSI (Pay Related Social Insurance), but the top band is €248.30 ($299/£225) per week for those aged over 66 years old who have paid at least 48 years of PRSI, according to Ireland’s Citizens Information service. An additional €10 ($12/£9) per week is paid to those aged 80 or above. The maximum weekly value of the lower means-tested state pension is €232 ($276/£206) per single person. 



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

13th: Chile

Chile offers means-tested social assistance and a mandatory and privately-managed defined contribution system. The poorest 60% of over-65s are entitled to a basic solidarity pension if they do not have another pension system in place. This amounted to 107,304 Chilean pesos ($140/£105) in 2018. For those who have paid contributions for at least 20 years and are under 70, the minimum old-age pension is 132,258.72 Chilean pesos ($173/£130) per month, increasing to 154,299.05 pesos ($202/£151) per month for those over 75. 



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

12th: Switzerland

In Switzerland there is an earnings-related public pension and a mandatory occupational pension system where rates increase with age. If contributions have been made throughout an individual’s lifetime, their earnings-related pension will be between 14,100 and 28,200 Swiss francs ($15.5k-$30.9k/£23.2k-£30.9k) per year. Supplementary benefits are also granted if an individual does not have enough money to cover basic living costs, including essential needs, rent, and sickness reimbursement.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

11th: Germany

Germany’s government provides an earnings-related pay-as-you-go system based on points earned during a person’s career. One year of contributions equates to one pension point – these points are then added together and multiplied by a value to give a pension income amount. There is also social assistance for individuals who don’t have a sufficient income, which was €9,768 ($11.6k/£8.7k) per year per person on average in 2017. That year, a new law was introduced to address the historic difference in pensions in East and West Germany, so that by 2024 pension calculations will be the same nationwide.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

10th: New Zealand

In New Zealand there’s a universal public pension, and direct contribution retirement schemes offered through a system called KiwiSaver. In 2018, the basic pension for a single person living alone was N$463.04 ($320/£240) per week, which gives a total income of N$24,078 ($16.7k/£12.5k) per year, and this is adjusted year on year for inflation. 



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

9th: Canada

In Canada there is a universal flat-rate government pension, which is supported by a means-tested income supplement. There is also an earnings-related pension based on lifetime earnings. In 2020 you can receive your pension from the age of 65, with a maximum monthly payment of CA$1,175.83 ($908/£682). Seniors with little or no income can also receive additional assistance.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

8th: Norway

Norway has an earnings-related social security pension and mandatory workplace pension plans. There is a guaranteed pension in place for people with little or no retirement income that falls in line with wages – in 2018 it was NOK 192,383 ($21.2k/£15.9k) a year on average.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

7th: Singapore

The retirement income system in Singapore works around the Central Provident Fund (CPF), which covers all employed Singaporean residents. As in Malaysia, some benefits can be accessed before retirement age is reached, such as for housing and medical expenses. Those who aren’t members of the CPF are entitled to between S$300 and S$750 ($223-$557/£167-£418) in old-age benefit each quarter, depending on where they live, according to the Social Security Office of Retirement and Disability Policy.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

6th: Sweden

The Swedish retirement system is moving from pay-as-you-go to a funded method. There is also a means-tested top-up benefit, which ensures that everybody has at least the minimum guaranteed pension. This is calculated on years of residence in Sweden and any income-related pension. In terms of the public earnings-based pension, there is an upper limit of earnings of SEK 501,000 ($58,870/£44k) per year that can be considered, and the maximum monthly pension is SEK 8,597 ($1,010/£760) for single pensioners born after 1938, and SEK 7,861 ($925/£695) for married pensioners. Many Swedes also opt into occupational pension schemes. Swedes can apply for their income-related pension from the age of 62.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

5th: Finland

In Finland there is a basic, retirement income-tested pension, as well as a range of statutory earnings-related schemes. The basic pension is based on a residency test and no previous contributions are required. In 2018, the full monthly benefit for a single senior was €628.85 ($743/£559). There is also the guarantee pension, which ensures a minimum of €775.27 ($916/£690) per month if the national and earnings-related pension fall short of basic living costs. The typical age to take a public pension is 65.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

4th: Australia

The Australian government offers a means-tested Age Pension and there’s also a mandatory workplace pension scheme. The Age Pension is in place for those who have been unable to save enough to live comfortably through their senior years, and currently the fortnightly entitlement is AU$946.30 ($695/£522) for a single person and AU$711.80 ($525/£393) for each person in a couple. This includes an energy supplement.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

3rd: Israel

In Israel there is a universal state pension, as well as private pensions with mandatory employer and employee contributions. As of January 2020 the basic pension is 1,558 Israeli shekels ($474/£355) per month for a single person, which increases to 1,646 shekels ($500/£375) for those over 80 years old, according to the National Insurance Institute of Israel. There is also a targeted pension in place for those whose income doesn’t reach the minimum level to cover basic living costs, and the benefit is dependent on age, marital status and the size of the household.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

2nd: Denmark

There is a basic public pension scheme in Denmark, as well as a means-tested supplementary pension benefit and mandatory occupational schemes. The public pension covers the whole Danish population, and seniors in a difficult financial situation can receive a supplementary benefit on top of that. The basic amount is DKK 6,237 ($990/£745) per month, which adds up to DKK 74,844 ($11.9k/£8.9k) in a year. Basic pension is reduced if an individual’s earnings exceed DKK 322,500 ($51.2k/£38.5k).



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

1st: The Netherlands

Both Denmark and the Netherlands were awarded ‘A’ grade pension systems by Mercer, but the Netherlands just came out on top as the world’s best. The country offers its citizens a flat-rate public pension, and an earnings-related occupational pension that is pretty much mandatory. Most employees belong to these schemes, which are industry-wide and are based on lifetime earnings. The basic Dutch pension is 70% of the net minimum wage, and so single pensioners receive €1,270.67 ($1.5k/£1.2k) each month, while couples can receive 50% of the net minimum wage, reaching €870.03 ($1k/£790) each a month.

Now discover real retirement ages around the world



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article


32/32 SLIDES

Source Article

Exit mobile version