Gender gap in retirement: Norwegian men retire earlier than women

October 31, 2018 - 06:25

More than half of all Norwegian men approaching retirement age choose to draw an early pension. But only 20 per cent of all women do the same. Many of them are ineligible for early retirement.

The gender gap in retirement: Norwegian men can afford to retire earlier than women. (Photo: Shutterstock)

Half of all 66-year-old men in Norway now take early pension benefits, according to new numbers from Statistics Norway. In fact, these men have often chosen to retire several years before they reach the official retirement age of 67.

The same is far from true for women.

The data also show that wealthier people are on average also more likely to take early retirement.

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Seniors fill up the piggy bank

Norway’s 2011 pension reforms made it possible for people to take early retirement at the age of 62.

At the same time, the reforms made it possible to continue to work as much as you want even though you if you are receiving a retirement pension payout.

Many men who draw on these early retirement payouts do in fact continue to work for several years after their retirement. This is particularly true for more highly educated men.

In fact, 57 per cent of all Norwegians aged 62-66 who took early retirement pensions in 2017 combined their pensions with work, according to figures from the Norwegian Labour and Welfare Administration.

The Statistics Norway numbers also show that 66-year-olds who chose early retirement had nearly NOK 600,000 more in household wealth than people who did not take early retirement pensions.

In summary: Many more financially privileged men and some more financially privileged women use early retirement to fill up their piggy banks.

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Women don’t meet the requirements for early retirement

One reason behind this big gender difference when it comes to early retirement is that women are less likely than men to meet Norway’s requirements for early retirement.

In general, women in this age group have earned less over the years. Far more women than men have worked part time, and they are more likely to have worked fewer years than men.

Thus, they only meet the minimum pension level (minimum pension) and cannot retire before they are 67.

The Norwegian pension system pays out in part based on how much you have earned and paid in tax over the course of your working life.

Read More: Keeping older workers in the workforce

Old gender differences

Part of what is also reflected in these numbers is that people who are retiring now were born in the last half of the 1940s and the first half of the 1950s.

This is a cohort where old gender differences still affected an individual’s career. Many women from this period simply didn’t work as much outside of the home as men.

This difference is expected to shrink in the coming years. The Norwegian Labour and Welfare Administration already reports that the difference between women and men has decreased among younger retirees.

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Women more likely to receive disability benefits

Among those who turned 67 in 2016, about 40 per cent of women were receiving disability benefits.

The corresponding proportion among men was 27 per cent.

This is another important reason why fewer women than men retire early. A great number of women between the ages of 62-66 are already receiving disability benefits, which prevent s them from drawing a pension before they turn 67.

However, researchers found no systematic correlation between the age at which people retire and how long different occupational groups can expect to live as retirees.

For example, a janitor or a driver can expect to live on average 3-4 years less than someone with a higher education. But, roughly the same number of people in both groups take early retirement. 

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Number of people receiving minimum pension on the decline

Roughly 16 per cent of people of retirement age receive what is called a minimum pension, which varies between 153,000 Norwegian Kroner (NOK) (approx. 18,300 USD) and 187,000 NOK (approx. 22,200 USD) a year depending upon their year of retirement.

A large majority of individuals who are living on a minimum pension are women, many of whom are older.

Among men aged 67-69 years, the proportion of minimum pensioners is now down to 3 per cent.

Among women who are 85 years of age and older, 43 per cent live on a minimum pension.

The Norwegian Labour and Welfare Administration report the average retirement pension as approximately 238,000 NOK (approx. 28,300 USD).

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Read the Norwegian version of this article at forskning.no

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