Finns Retire Later, Boosting Pension System by Billions

Finnish citizens retired on average at age 63.2 last year, according to the Finnish Centre for Pensions (ETK). ETK Director General Mikko Kautto noted that retirement has been steadily delayed in recent years. A 2009 agreement between labor market organizations and the government led by Matti Vanhanen of the Centre Party set a target: raise the average retirement age from 59.4 to at least 62.4 by 2025. That goal has now been exceeded, with the current average nearly a full year above the original target. Kautto attributes this positive trend to several reforms in pension rules. Early in the period, the elimination of unemployment pensions pushed back retirement. Later, increases in statutory retirement ages played a key role. Improved education levels, better health, and changes in work have also reduced transitions to disability pensions. Kautto emphasized that longer working lives significantly benefit Finland’s welfare economy, generating billion-euro impacts. Delayed retirement strengthens pension funding and boosts tax revenues for both state and municipalities. Workers also receive higher pensions through extended careers. ETK Development Director Jari Kannisto added that employment rates among people over 60 have risen notably since the 2017 pension reform. Even as overall employment dipped last year, older worker participation kept growing. Looking ahead, those aged 65 and over will form an increasingly vital labor reserve. Kautto stressed that job availability remains essential, noting limited progress so far on government promises to improve youth and mid-career employment.