Wealth in retirement exists, it just varies across Europe.
Pensioner households in some countries of the European Union have up to 30 times more assets, which do not only consist of pension income, but also other movable and immovable property that shape the standard of living in old age. Almost 20,000 pensioners in neighboring Croatia receive more than 1,800 euros in pensions. Five pensioners have pensions of more than 5,000 euros.
Croatian pensioners among the poorest
Thus, households aged 65 to 74 in Luxembourg have a median net asset of 1.22 million euros, while those in Latvia have only 36,300 euros at their disposal. Wealth of the over-65s by country comes from the European Central Bank’s 2023 Household Finance and Consumption Survey (HFCS).
At the bottom of the ranking, along with Latvia, there are five other countries where households aged 65 to 74 have median net assets of less than EUR 100,000. Among them are Lithuania (51,400 euros), Hungary (54,400 euros), Estonia (73,500 euros), Croatia (75,900 euros) and Portugal (99,200 euros). Euronews.
After Luxembourg, where wealth in retirement is measured in millions, Malta follows with a significantly lower 310,000 euros, then Belgium with 307,000, then Ireland with 297,000, and then France and Germany with 232,000 euros of medial net assets of those aged between 65 and 75, reports Mirovina.hr.
Wealth falls after the age of 75
For those over 75, wealth declines. Median net assets of households over 75 years old in the euro area amount to 144,400 euros, which is 40,900 euros, or 22 percent less than for households aged 65 to 74 years. In almost all countries, median wealth is lower among households older than 75 than among those aged 65 to 74. The only exceptions are Luxembourg and Belgium. In Austria, the wealth of people over 75 is 51 percent lower than in the 65 to 74 age group, and in Germany by 44 percent. In France, this difference is much smaller and amounts to only 14 percent.
Differences in income, household composition, real estate ownership rate, indebtedness to purchase real estate and housing prices are among the main factors that cause differences in net wealth between countries, as pointed out by the European Central Bank.
Property as the most valuable resource
“These differences between countries remind us that wealth is never just the result of individual saving behavior… They reflect the long-term interaction of real estate markets, welfare states, pension systems, credit institutions, family wealth transfers and historical paths of wealth acquisition,” said Professor Fabian Pfeffer of LMU University in Munich and founder of the International Center for Research on Inequality in Munich.
In countries where older households had broad access to real estate ownership and benefited from rising real estate prices, median net assets are typically significantly higher, Professor Pfeffer explained. Where rental housing is more common, private net wealth may appear smaller, even if the elderly are protected in other ways.
The net worth figures do not include the present value of public pension entitlements. Pfeffer emphasizes that pension rights are among the most important economic resources for many seniors.
“A generous public pension system can reduce the need to build up large private assets for old age. In this sense, lower private wealth of older households may sometimes reflect a stronger welfare state rather than weaker economic security,” Pfeffer concluded.
