Are you considering retirement in Hungary? It’s worth thinking twice
With Hungary’s pension system ranking in the lower middle range, an ageing population and economic pressures are raising concerns about long-term sustainability. Those considering retirement in Hungary must take proactive steps, as relying solely on state support may no longer be enough. Planning ahead and boosting personal savings will be key to securing a stable and comfortable future.
Pension systems evaluated
As Piac és Profit writes, Allianz has once again evaluated 71 pension systems worldwide using its Allianz Pension Index (API), highlighting the growing pressure for reform. The Global Pension Report assessed countries based on demographic trends, fiscal stability, and the sustainability of their pension systems, including contribution periods and funding. The findings reveal a global need for reform, with the overall score rising slightly from 3.6 in 2023 to 3.7, indicating increasing strain. Denmark ranks with a score of 2.3, followed by the Netherlands and Sweden at 2.6, thanks to their well-structured funded schemes.
Understanding these rankings is crucial for those considering retirement in Hungary, as pension sustainability varies significantly by country. While Denmark and Sweden have solid systems, Japan stands out in fourth place (2.7), largely due to its unique approach. Many of its elderly population continue working well into their late 60s. This trend suggests that higher retirement ages may become more common worldwide. As pension systems evolve, retirees looking for financial security must carefully assess the long-term stability of their chosen destination.
Retirement in Hungary
Hungary’s pension system ranks in the lower middle range with an overall score of 3.9, highlighting concerns over its long-term sustainability. Like many European nations, Hungary faces demographic challenges, with the old-age dependency ratio expected to rise from 32% to 47% in the next 25 years. The report suggests that improving employment opportunities for older workers could ease some of this pressure. However, a cultural shift is also needed, as many nearing retirement in Hungary have been accustomed to state support without actively planning their financial future. With a shrinking workforce, individuals will need to take greater responsibility for their own retirement savings.
Thinking ahead
Starting early is key, as even Generation X must save significantly to maintain their standard of living in later years. The Allianz pension report estimates that younger generations in the euro area are collectively saving EUR 350 billion less than required annually. While this figure may seem alarming, the analysis suggests that a 25% increase in savings rates could help bridge the gap. For those planning retirement in Hungary, building personal savings and exploring supplementary pension options will be crucial in ensuring long-term financial security.
Read also:
- The big showdown: Is life better in Romania than Hungary?
- Will it be more favourable to be a pensioner in Romania than in Hungary? Here’s what the expert says
Featured image: depositphotos.com
The social security system is the very definition of a Ponzi scheme.
Somebody needs to grow a pair and declare it dead, at least as a primary or even just significant source of capital to rely on after retirement.
Why is it dead, @michaelsteiner? You question our Politicians when they tell us all of their lavish spending on “Hungarian Families!” will yield those coveted higher birth rates? The old age dependency ratio will fall! We do not need foreigners to work in Hungary and pay taxes! Hungary is Sovereign!
Appalling and an Antiquated system.
It should be, besides the NEED of a MAJOR overhaul – elevating it into the “modern age” not a system still functioning under procedures from the past, but ADAPTED to this century, the Economic and the Financial World we live in 2025.
In it’s NEEDED overhaul, it NEED’s to be VISIONARY – into the FUTURE.
The Cost of Human life – to LIVE in these times – must BE reflected in RETIREMENT funding a Government provides.
It should be INDEXED – that (2) twice yearly ADJUSTED to the rate of INFLATION of the country, which in Hungary – would be and should be INTRODUCED.
If we at present, in our ageing declining population total 9.6 million, factually have 1.1 million of our citizens living in POVERTY, and “strong” statistical data is suggesting we near that 1.1 to increase to 1.2 in the next (3) three months, what percentage of “those” – in POVERTY – receive a Retirement Pension, or are provided Financial and “other” – Orban – Fidesz Government ASSISTANCE’s to LIVE ?
There is an Un-fair un-balanced Retirement & Pension System(s) in Hungary, that in both these category’s of RESPONSIBILITIES of a “supposed” Democratic Government, citizens of Hungary are being horrendously “Short Changed”.
History never Lies, and the TRUE moral test for a Government – is how they TREAT the most Vulnerable.
Moral – what a test for the Orban led Fidesz Government of Hungary – it’s MEANING and APPLICATION.