It’s time to take stock of retirement in Italy! Italy is known for being in the top 5 countries where people live the longest and healthiest lives. As reported by Santé Magazine, this information is confirmed by numerous statistics, making it the ideal place to live a sweet life, the much-dreamed “Dolce Vita”. However, the administrative question is never simple, and it is important to proceed step by step to fully enjoy retirement in Italy.
- Age of retirement in Italy
- The pension fund in Italy
- Retire in Italy taxes
- The amount of retirement pension in Italy
- Nursing homes in Italy
Age of retirement in Italy
The legal retirement age in Italy is 67 years old, but it is essential to have contributed for a minimum of 20 years. In Germany, Denmark, and Greece, the situation is similar since the minimum age is also set at 67 years. This may surprise us when considering that in France, the retirement age is set at 62 years. However, there are exceptions that allow for early retirement in Italy, provided that one is at least 62 years old and has accumulated at least 38 years of contributions, according to the new law: Article 14 of decree law 4-2019.
The pension fund in Italy
The retirement fund in Italy is the INPS (Istituto Nazionale Previdenza Sociale – National Institute of Social Security). The INPS is responsible for disbursing Italian pensions, as well as administering Italian social assistance programs
Retire in Italy taxes
The taxation of Italian retirement depends on annual income: up to 15,000 euros, the tax rate is 23%; up to 28,000 euros, the applicable tax rate will be 25%; up to 50,000 euros, 35%; and if you receive more than 50,000 euros, the taxation will be 43%. For all individuals who receive less than 8,500 euros annually in retirement, there is no taxation.
The amount of retirement pension in Italy
The amount of retirement pension in Italy, will depend on each individual’s career path, the number of years of contributions, the amount of salaries earned, and the retirement age. The equivalent of the minimum pension in Italy is called the ‘assegno sociale,’ with an amount of 469.03 euros, which will increase by 7.3% in 2023.
To assist workers, the INPS has provided a simulation tool for calculating retirement benefits in Italy. This service is accessible through various secure means, including SPID. A more immediate tool has been published by the newspaper ‘Il Sole24ore,’ allowing you to input some data to get an approximate idea of the retirement age with a sufficient number of contributions and the amount of pension.
Taking the example of a woman born in 1960, who earned a gross salary of 30,000 euros throughout her life and worked for 20 years as an employee, she can retire at the age of 63, receiving a net annual amount of 16,338 euros, which is 1,361 euros per month, over 12 months.
Nursing homes in Italy
The rates of nursing homes in Italy vary depending on the choice of the facility. There are different types of solutions based on the needs of each resident.
Day structures, night structures, temporary or long-term, with medical supervision or not, the solutions are multiple and varied.
The most well-known structures are the RSA (Residenze Sanitaria Assistenziali), which are facilities for dependent elderly people. They can belong to the public sector (municipality or ASL), be private but affiliated with the national health system, or completely private.
Average prices range between 1500 and 1800 euros per month, but it all depends on the region and the needs of the resident. Some nursing homes may offer rates of up to 3000 euros per month!
In any case, it is up to the resident to pay for their accommodation. In cases where there are insufficient resources, it would be up to the family to pay, and in more extreme cases, there may be a small contribution from the state in the form of tax reductions. The municipality can also contribute up to 50% of housing costs.
The best retirement system in Europe
The best retirement system in Europe… is not the Italian one! However, Italy still ranks among the 15 countries with the best retirement systems in the world! According to a study conducted by the Blacktower Financial Management Group, the top spot is held by Finland. The study is based on several factors including the retirement age, average retirement income, and the number of people contributing to the pension fund. A list of the top 15 countries with the best pension systems in the world has been compiled, and Italy ranks 11th, following Poland, Sweden, Slovenia, France, Latvia, Greece, the Czech Republic, Switzerland, and Israel.
Are you ready to retire in Italy?