France's Pensions Outpace Wages—Why Retirees Earn More Than Workers

French retirees aged 65 and above currently earn more in gross monthly income than their working-age counterparts, according to a Financial Times analysis of the Luxembourg Income Study. The average pensioner in France earned approximately €1,626 ($1,926) at the end of 2022 and has maintained a 2% lead over the average working adult’s income since then. This contrast sharply with trends in other developed nations, including the U.S., where retirees earn about a sixth less than employed adults, and Australia, where the gap is even wider at a third less.

The phenomenon is not new, with the report showing that from 1970 to 2020, the median income for working-age French citizens between 18 and 64 increased by 100%, while that of retirees grew by over 160%. The disparity is largely attributed to France’s generous pension system, which offers a high wage replacement rate—74% on average—compared to 50% in the U.S. Additionally, French retirees can access their pensions at a younger age, typically starting at 62, whereas Americans must wait until 66 or 67 to claim Social Security benefits.

Government spending on pensions and related care has also played a critical role in supporting French retirees. Since 2001, France has increased its GDP share allocated to old-age benefits and health care by 2.9%, significantly higher than the peer average of 1.5%. As of 2023, 14% of France’s GDP is dedicated to public pensions, compared to just 7% in the U.S. The Centre of European and International Liaisons for Social Security (Cleiss) explains that the French pension plan allows retirees to receive up to 50% of their average annual earnings, calculated based on their 25 highest-earning years.

In contrast, many American retirees struggle to afford a dignified post-work lifestyle. A survey by D.A. Davidson found that 40% of retired Americans fear their savings won’t support their ideal retirement, and nearly 60% express a desire for additional income streams such as side gigs. According to the 2025 U.S. Retirement Survey by Schroders, 20% of retirees are described as “struggling” or “living the nightmare,” while only 5% feel they are “living the dream.” This highlights the stark economic differences between the two countries' retirement systems.

France’s current pension model is increasingly under pressure due to its aging population and rising expenditures. The country’s dependency ratio is expected to rise from 21.5% of the population over 65 in 2024 to 29% by 2070, placing greater strain on the worker-retiree solidarity system. The government has responded with reforms aimed at addressing long-term sustainability. In 2023, former Prime Minister Élisabeth Borne announced a plan to gradually increase the retirement age from 62 to 64 by 2030, a move that sparked widespread protests and resistance.

Despite the backlash, the reforms are considered necessary to prevent pension deficits from reaching 13.5 billion euros by 2030, according to projections from the French Pensions Advisory Council. The government has also introduced measures to protect low-income retirees, including indexing the minimum pension to inflation and extending early retirement rights to certain public-sector jobs. While these steps aim to balance fiscal sustainability with social equity, they underscore the complex trade-offs facing governments in managing long-term demographic and economic shifts.