Ensuring a pension close to the last salary continues to be one of the biggest concerns for those entering the job market. The 90 percent target may sound ambitious, but it is achievable for long, stable careers. The warning comes in a report from the OECD, an organization specializing in economic and social analysis, which identifies a combination of decisive factors: the age at exit, the length of the contributory career and compliance with the system’s rules.
According to Executive Digest, which cites the “Pensions at a Glance” study, a young person who started working at age 22, in 2024, could achieve a net replacement rate above 90 percent if they complete 46 years of discounts and retire at age 68.
For those who receive the average salary, the estimated rate reaches 92.7 percent, a value that places Portugal among the best European performers. According to the same source, this percentage remains above 90 percent for both lower and higher incomes, making it clear that the decisive element is not the salary itself, but career continuity.
How to get a high pension
The calculation presented by the OECD differs from other institutions, such as the European Commission, mainly due to the assumptions used. While Brussels considers scenarios with interrupted or shorter careers, the OECD study is based on the idea that workers fully complete the entire contribution period up to legal retirement age. By doing so, replacement rates increase significantly and approach the maximum values possible within the system.
In Portugal, the legal retirement age adjusts to the average life expectancy. For those who started their career in 2024, the threshold is set at 68 years old. Working until this age is crucial for those who want a pension close to the entirety of their last salary, as any early departure involves significant penalties.
Retiring sooner or later makes a difference
Those who choose to leave early face heavy reductions. In 2025, the base penalty is 16.9 percent, plus an additional 0.5 percent for each month in advance. These reductions, considered severe in the report, could significantly move the final pension away from the desired level.
The opposite scenario also exists. Anyone who extends their career beyond the legal age is entitled to bonuses that exceed the actuarially neutral rate. This creates an additional incentive to remain in the job market, especially for those looking to top up their pension in a short period before leaving permanently.
There is also the possibility of accumulating salary and pension after the age of 68. The regime is advantageous for workers and companies, but remains little used. In 2023, only 14 percent of pensioners maintained parallel employment, below the OECD average of 22.4 percent.
Long career and exit at the right time
The report highlights that a 46-year contributory career, combined with retirement at age 68, is the combination that ensures replacement rates close to the final salary. Interruptions, even small ones, reduce the value of the pension. On the contrary, prolonging the activity and taking advantage of available incentives can maximize the amount received.
According to , the strategy to ensure a retirement close to 90 percent of the last salary is based on three pillars: long career, leaving at legal age and use of mechanisms that value the extension of working life. These are the elements that can transform a good intention into a real result.
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