In which countries does the pension cover the largest share of wages?
The extent to which citizens' previous income is maintained after retirement varies drastically across countries of the world. In the ranking based on OECD data, Spain and Greece occupy the top positions, while in Lithuania, the ratio of pension to salary does not even reach 20 percent.
In which countries does the pension cover the largest share of wages?
How much of their previous salary can a retired person receive as a pension? Depending on the country, this figure varies from over 80 percent to less than 20 percent.
A Visual Capitalist infographic compares countries by their projected gross pension replacement rate. The calculations are based on data from the Organisation for Economic Co-operation and Development (OECD).
The replacement rate compares the amount of pension benefits to the salary a person received before retirement. Here, both salary and pension are calculated before taxes and mandatory contributions are deducted.
Therefore, to put this indicator simply, it can be understood as the share of a person's previous labor income that is "replaced" by pension payments after retirement.
The calculations are based on an average worker who starts their career in 2024 at the age of 22. It takes into account mandatory public and private pension schemes, but does not include voluntary private pension funds set up by citizens.
Southern European countries lead at the top of the ranking. Spain, Greece, Portugal, and Italy are in the top ten.
Spain and Greece, in particular, stand out with high indicators.
In Spain, the projected pension replacement rate is 80.4 percent. That is, according to the calculation model, pension payments will be equal to approximately four-fifths of the pre-retirement salary.
In Greece, this figure is 79.6 percent.
At the same time, the ranking shows that a country's overall level of wealth does not always determine how high the ratio of pension to salary will be.
For example, in Mexico and Turkey, the projected replacement rate reaches nearly 70 percent. In Germany, however, it is 42.1 percent.
In the US, the figure is also relatively low at 39.7 percent.
These differences show that the structure and mechanisms of pension systems vary significantly from country to country.