Average retirement age inches up in 2019

In 2019, people in the country retired on an oldage pension at the average age of 61.5 years. In practice, that means a year-on-year increase of two months, said the Finnish Centre for Pensions in a press release.

Last year, a total of 44,500 persons retired on an oldage pension, posting a 10 per cent drop from the corresponding number in 2018.

In 2019, most of those born in 1956 reached their retirement age, which is three months higher (63 years and 3 months) than the average age of those born a year earlier.

The increase in the retirement age agreed on in the 2017 pension reform has raised the average effective retirement age and reduced the number of new retirees on oldage pension. At the same time, working lives have also been extended.

The average effective retirement age has risen by 2.7 years since the beginning of the century. The goal is for the average effective retirement age to be 62.4 years in 2025 at the latest. To reach that goal, the effective retirement age would have to rise by an ample 10 per cent each year.

“At the moment it would seem that we can reach the target set for the increase in the effective retirement age since people retire on oldage pension at increasingly higher ages. What is worrisome is the increase in the number of new disability pension recipients,” said Finnish Centre for Pensions Development Manager Jari Kannisto.

In 2019, the expected effective retirement age for 25-year-olds was 61.5 years and for 50-year-olds 63.3 years. The expected effective retirement age will come true if the retirement and mortality rates remain on the level of the statistical year.

In 2019, approximately 65,000 persons retired on an earnings-related pension. Of them, 44,500 persons (71%) retired on an old-age pension.

This was 4.400 persons (9%) less than in 2018.

The number of new retirees on a disability pension grew slightly in 2019 compared to that in 2018. Roughly 20,300 persons retired on a disability pension in 2019, which was 400 persons more than in 2018.

“Unfortunately it seems that retirement on a disability pension has become more common among young women,” Kannisto explained.