How much of your salary does Spain’s pension replace?
Spain has the highest pension replacement rate among 38 countries in an OECD-based comparison, at 80.4%. The figure is well above the OECD average of 52.0% and nearly double the rate recorded for the United States, at 39.7%.
For foreigners living in Spain or considering retirement in Spain, the comparison offers a snapshot of how the country’s mandatory pension arrangements are designed to replace earnings after retirement.
What Spain’s 80.4% pension replacement rate measures
The gross pension replacement rate compares pension benefits with pre-retirement earnings. Both are measured before taxes and contributions.
The estimates include mandatory public and private pensions, but exclude voluntary private retirement savings.
According to the OECD, replacement rates are calculated for full-career workers from age 22. Career lengths can differ between countries because normal retirement ages are different. The figures are expressed as a percentage of earnings at the national level and are not gender-specific.
Spain ranks first, ahead of Portugal and Italy
Southern European countries feature prominently in the top 10 of the ranking. Spain is first, followed by Greece at 79.6%.
Country | Gross pension replacement rate | Rank |
|---|---|---|
Spain | 80.4% | 1 |
Greece | 79.6% | 2 |
Portugal | 72.4% | 8 |
Italy | 70.6% | 9 |
OECD average | 52.0% | — |
Luxembourg, Colombia, the Netherlands, Austria and Denmark also rank ahead of Portugal and Italy.
How Spain compares with the US, Canada and Germany
Spain’s rate of 80.4% compares with 39.7% in the United States, which ranks 29th out of 38 countries.
- Canada’s replacement rate is 37.1%, while Germany stands at 42.1%.
- Mexico and Turkey both have rates close to 70%, at 69.6% and 69.1%, respectively.
At the lower end of the comparison, Lithuania has a gross pension replacement rate of 17.4%. Japan’s rate is 36.5%, and South Korea’s is 33.4%.
What the ranking does and does not show
The figures compare pension benefits and pre-retirement earnings for an average earner with a full career. They include mandatory pension schemes and do not include voluntary private retirement savings.
The OECD notes that replacement rates are only one part of retirement security. The comparison shows how differently pension systems replace workers’ earnings across OECD countries, but it is not an individual pension calculation.
Spain’s 80.4% gross pension replacement rate nevertheless places it at the top of the 38-country ranking, compared with an OECD average of 52.0%.
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