The possibility of reaching retirement with an income very close to your last salary is not out of reach in Portugal, but it depends on a demanding set of conditions. The idea, which continues to mark the beginning of many workers’ professional lives, is now gaining new momentum with recent data that point to replacement rates above 90 percent in specific scenarios.
According to , a website specializing in economics and current affairs, which cites the OECD’s “Pensions at a Glance” report, a worker who starts working at the age of 22 in 2024 will be able to get closer to this level if they complete a contributory career of 46 years and retire at 68. In these cases, the net pension tends to come significantly closer to the income earned at the end of working life.
The numbers indicate that, for those earning the average salary, the replacement rate can reach 92.7 percent. This value places Portugal among the European countries with the best results in this indicator. The same trend is seen at different income levels, which suggests that the regularity of contributions weighs more than the salary throughout a career.
Long careers make a difference
The data shows that the determining factor is not so much the value of the salary, but the consistency over the years of deductions. Uninterrupted careers allow you to accumulate higher entitlements, which translates into a pension that is closer to your final income.
On the other hand, periods without contributions, due to unemployment, informal work or prolonged breaks, end up reducing the final retirement amount. The system thus privileges stable and continuous professional trajectories.
Assumptions explain differences in calculations
The results presented by the OECD differ from other analyses, particularly those carried out by the European Commission. The divergence concerns the assumptions used. While Brussels considers scenarios with shorter or interrupted careers, the OECD assumes that workers maintain continuous activity until legal retirement age.
This methodological difference leads to higher estimates, close to the maximum limit allowed by the system. In Portugal, the retirement age is indexed to the evolution of average life expectancy. For those who started working in 2024, the reference is 68 years.
Reaching this age without resorting to early retirement is one of the most relevant factors for those who want to avoid losses. Leaving early involves significant penalties on the value of retirement, which can directly compromise income in the post-work phase.
Penalties and incentives shape the final value
Early reform continues to be heavily penalized. In 2025, the basic reduction was 16.9 percent, plus an additional cut of 0.5 percent for each month in advance. This is a considerable impact, which is permanently reflected in the amount received.
On the other hand, prolonging active life can bring benefits. The system provides bonuses for those who remain in the job market beyond the legal age, acting as an incentive to postpone retirement. This mechanism allows you to increase the value of your retirement, especially in the last years of your career.
Working after retirement is still rare
There is also the possibility of accumulating a pension with income from work after the age of 68. Despite this, membership remains limited. In 2023, only 14 percent of retirees in Portugal maintained professional activity, below the OECD average, which is 22.4 percent.
In essence, the scenario outlined points to a clear conclusion. According to the same source, achieving a pension close to the last salary depends mainly on three factors: a long and uninterrupted career, compliance with the legal retirement age and taking advantage of available incentives to prolong professional activity. This combination is the difference between a comfortable retirement and a significant drop in income.
Also read:
