Effective retirement age continues to rise rapidly
Finnish people extend their working lives faster than estimated. In 2024, people retired on an earnings-related pension at an average age of 63.1 years. The target set for 2025 has already been reached and passed by more than half a year.
The retirement age in Finland has risen rapidly this decade. This favourable trend continued last year. According to the latest statistics from the Finnish Centre for Pensions, the expected effective retirement age in 2024 was 63.1 years, an increase of 0.3 years compared with 2023. New recipients of disability pension and old-age pension are regarded as retired.
“We are now more than six months ahead of the goal. Following the 2005 pension reform, the goal for the expected effective retirement age was set at 62.4 years by 2025. The goal was considered ambitious, but it was achieved early on”, says Development Manager Jari Kannisto from the Finnish Centre for Pensions.
The increase in the retirement age came to a halt in the mid-2010s. Since then, the main reason for the new increase has been the increase of the retirement age for the old-age pension, which was included in the 2017 pension reform.
Table: Retirement expectancy 2002–2024 (Statistics database)
40,000 Finns retire each year on the old-age pension
In recent years, just under 58,000 people have retired with an earnings-related pension. Nearly 18,000 Finns have retired on a disability pension and 40,000 on an old-age pension.
In recent years, the partial old-age pension has become a popular form of pension. In 2024, it was selected by 31,000 people over the age of 60. Most of them continued to work at the same time.
New retirees by pension benefit 2005-2021 (Excel)
Retirement age continues to rise in the coming years
According to Kannisto, the favourable upward trend in the retirement age is likely to continue.
“At the moment, there is no reason to doubt that the current trend will continue. The old-age pension retirement age continues to rise and the employment rate of the elderly has remained fairly good.”
However, the rise in the retirement age has also slightly increased the number of people whose ability to work has declined as they approach their retirement age.
“This is a natural trend, but it is unlikely to increase significantly in the next few years. Overall, disability has continued to decline.”
The retirement age for the old-age pension increases by age group
The retirement age rises by three months by age group.
In 2025, those born between 1 July 1960 and 31 March 1961 will reach their retirement age, which is under 65 years.
In 2027, those born in 1962 will reach their retirement age, which is 65 years.
| Year of birth | Retirement age |
|---|---|
| 1960 | 64 years 6 months |
| 1961 | 64 years 9 months |
| 1962–1964 | 65 years |
Expected effective retirement age calculated as the life expectancy coefficient
The expected effective retirement age measures the retirement trend in the earnings-related pension system.
It depicts the average retirement age if the retirement contingencies and the mortality rates remain on the level of the review year.
The expected effective retirement age is independent of the demographic age structure and calculated following the same principle as when calculating the expected life expectancy that measures the life span.
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