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Can I continue working when being retired?



In Luxembourg, you can earn money from professional work when receiving a retirement pension (Photo : ING Luxembourg)

In Luxembourg, you can earn money from professional work when receiving a retirement pension (Photo : ING Luxembourg)

The answer is yes. In Luxembourg, you can earn money from professional work when receiving a retirement pension. You won’t be the only one to do so. Even if the phenomenon is still marginal – less than 3% in 2017 according to the Ministry of Economy -, more and more pensioners in the Grand Duchy continue to carry out a paid activity. But there are some rules to respect if you do not want your pension to be reduced, suspended or withdrawn.

A distinction must be made between retirement and early retirement pensions because the rules are different. As a reminder, you can draw a retirement pension under two main conditions. First, you are at least 65 years of age. Second, you can prove that you have made at least 120 months of insurance contributions (whether mandatory, continued or voluntary) or retroactive payments to cover periods during which you were obliged to interrupt or reduce your professional activity. You may be entitled to an early retirement pension at the age of 57 or 60, provided that you have held 480 months of pension insurance.

Combining work with a retirement pension

If you are a retirement pension recipient, you can carry out a professional activity, salaried or not salaried (e.g. as a self-employed professional), whether full-time or part-time. You can work and earn as much as you like, your gross pension amount won’t be impacted. If your work is salaried, you can even ask the National Pension Insurance Fund (Caisse Nationale d’Assurance Pension or CNAP) to reimburse you for the pension contributions you make after you turn 65. You have to fill in a form and send it to the CNAP.  

Combining work with an early retirement pension

If you are an early retirement pension recipient, you have to bear in mind that there are some restrictions, depending on your work.

What happens if you have a salaried work? In this case, your pension amount won’t be affected if you earn less than one third of the social minimum wage, i.e. €752.32[1] (€2, 265.95 divided by 3) per month or €9,027.80 (€752.32 x 12) per year.

If your total salary for the year is greater than one third of the social minimum wage, there are three potential scenarios.

1.    Your pension amount is not reduced if the total sum of your pension and your earnings is still lower than the average of your five highest contributory annual salary amounts on your social security record.

2.    If the total sum of your pension and your earnings is higher than this average, your pension amount is reduced to not exceed this upper limit.

3.    Your pension is withdrawn if your earnings, spread over the year, exceed the average of your five highest contributory annual salary amounts on your social security record.        

To make it clearer, let’s take the following example. You receive a monthly gross amount of €4,000 from your early retirement pension. At the same time, your gross monthly salary is €2,000. The monthly average of your five highest salaries subject to contributions during your insurance history is €5,000. As your salaried earnings are higher than one third of the social minimum wage and the total sum of your pension and salary exceed the average of your five highest salary amounts, your monthly pension will be reduced by €1,000 (€6,000 – €5,000): €3,000 instead of 4,000. If you don’t want to exceed the set limit, you must reduce your monthly earnings to €1,000. If your wages, spread over the year, are higher than €5,000 per month, your pension is withdrawn.

Good to know: the Chamber of Employees (Chambre des Salariés de Luxembourg or CSL) has created a simulator that allows you to calculate the amount of your early retirement pension if you combine it with a salary.

What happens if you have an unsalaried job as a self-employed worker? Well, the conditions are more stringent. If your income, spread over the year, exceeds one third of the social minimum wage per month, your early retirement pension is withdrawn.

In both cases (salaried and self-employed), your early retirement pension is only recalculated once a year with effect on April 1. There are three exceptions to this rule. First, you can prove a reduction in your income of at least 10% for three months. Second, your income has increased by more than 25%. Finally, you are returning to or leaving your professional activity. The reduction provisions remain valid until you reach the age of 65. At that time, the wages or income earned during the period you were drawing the early retirement pension are taken into account, and your pension is recalculated.    

Do not hesitate to contact the National Pension Insurance Fund (CNAP)[2] for more information.

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[1] As of 1 October 2021.

[2] Postal address: CNAP L-2096 Luxembourg. Phone:  (+352) 22 41 41-1. You can also send a contact form available here.