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Professionals

Retirement in Luxembourg for the self-employed and freelancers: the complete guide

October 1, 2025
Are you self-employed or freelance in Luxembourg? Your CNAP pension offers a safety net, but it’s not always enough to maintain your standard of living. In this article, we cover the key rules (3 pillars, age requirements, contributions via the CCSS), smart saving strategies, and a simple plan to boost your retirement without straining your cash flow. You’ll also discover solutions designed for the self-employed (including a dedicated pension plan) to turn your contributions into more predictable future income.
Contents and summary

In Luxembourg, retirement for self-employed workers is based on three pillars:

  • Statutory pension (CNAP): pay-as-you-go scheme, contribution of 24% of net income, statutory retirement age of 65 (early retirement possible at 57/60).
  • Second pillar: supplementary scheme set up by the employer.
  • Individual savings (third pillar): private solutions (life insurance, pension savings) with tax advantages to supplement the statutory pension.

To optimise their retirement, self-employed workers must plan ahead, check their CNAP entitlements and invest in a suitable pension savings plan (e.g. Pension Plan for Professionals) in order to secure their future income.

The pension system in Luxembourg: a reminder of the three pillars
The first pillar: the statutory pay-as-you-go pension

The first pillar is the cornerstone of the Luxembourg system. It is a pay-as-you-go scheme, managed by the National Pension Insurance Fund (CNAP). Social security contributions paid by those in work directly finance the pensions of retirees.

The overall contribution rate is set at 24% of gross income, usually shared between employer, employee and the State. For the self-employed, who have no employer, the full amount is payable by them alone.
The statutory retirement age is 65, provided the insured person can show at least 120 months of insurance (10 years). Pension entitlements can be claimed once professional activity comes to an end.

Two forms of early retirement exist:

  • At age 57, if the insured person can show 40 years of compulsory insurance periods.
  • At 60, if they can show 40 years of total insurance periods, including at least 10 compulsory years (this may include voluntary contributions and credited periods such as unemployment or study).

The calculation of the pension is based on a benefit made up of a fixed part (pension base) and a proportional part, according to contributions paid on income and the length of career. Each element has an impact on the final amount of the pension. Finally, a minimum pension is guaranteed, under certain conditions, so that an insured person with a full career does not receive a pension that is too low.

The second pillar: supplementary schemes

The second pillar corresponds to supplementary schemes set up by employers for their employees, in order to top up the statutory pension. These schemes are funded by the company and/or the employees and often operate under defined benefit or defined contribution rules.
The self-employed and freelancers, who have no employer, do not have access to these schemes through a company. They must therefore put their own arrangements in place if they want this kind of top-up.

The third pillar: individual savings

The third pillar is based on private savings and life insurance products. These solutions make it possible to build up supplementary capital and additional retirement savings through regular premium payments, while benefiting from tax advantages.
In Luxembourg, premiums paid into pension savings contracts are tax-deductible as special expenses, up to a ceiling set by law. This pillar is particularly important for the self-employed and freelancers, as it is often their only way of boosting their future pension.

How does retirement work for the self-employed and freelancers in Luxembourg?

Freelancers are subject to the same rules as other self-employed workers, whether their activity is craft-based, commercial, one of the regulated professions, or intellectual in nature. Their pension is covered by the general social security scheme and managed by the CNAP.

They contribute on the basis of their annual net income from professional activity, declared to the Direct Tax Administration (ACD). In return, they acquire the same rights as employees:

  • old-age pension at 65 (with at least 120 months of contributions),
  • early retirement possible at 57 or 60 depending on career,
  • disability pension,
  • survivor’s pension, paid where applicable to the surviving spouse.

Each benefit is strictly governed by law and must be the subject of an official application to the CNAP.

How can I contribute to a pension as a self-employed person in Luxembourg?

As a self-employed person, you are automatically affiliated to the Joint Social Security Centre (CCSS), on the basis of your own name and the data declared to the administration. You pay your compulsory social security contributions each quarter, calculated based on your net professional income.
The overall rate is 24%, entirely at your expense, applied up to a ceiling corresponding to five times the minimum social wage (SSM). Exception: the dependency contribution is not subject to a ceiling.
This contribution covers:

  • retirement,
  • illness,
  • maternity,
  • incapacity to work,
  • disability,
  • dependency.

The amounts are adjusted according to tax returns and taxation in Luxembourg, ensuring an accurate reflection of the self-employed person’s actual professional activity.

What is the pension fund for the self-employed in Luxembourg?

Unlike other countries, Luxembourg does not have a specific pension fund for the self-employed. It is the CNAP that manages the pensions of all workers, both employees and the self-employed.

The self-employed are therefore not covered by a separate scheme: they are integrated into the general scheme, which gives them the same pension rights as employees, subject to fulfilling the career and contribution requirements.

What are the advantages of self-employed status in Luxembourg?

Self-employed status offers several advantages:

  • Access to the same statutory pension scheme as employees, with full coverage for old age, disability, survivors and incapacity for work.
  • Tax flexibility, in particular through the deduction of contributions or premiums paid into supplementary products such as the Pension Plan for Professionals.
  • The possibility of adjusting declared income, and therefore contributions, within the limits of tax rules, according to changes in professional activity or economic circumstances.
  • The strength of the Luxembourg system, known for its financial stability and the automatic indexation of pensions, which is a valuable safeguard in times of economic difficulty.
How can you increase your pension as a self-employed person or freelancer?
The importance of diversifying income sources

The statutory pension provides a solid foundation, but it does not always guarantee a sufficient standard of living in retirement. For the self-employed, the risk is even greater, which makes it all the more important to plan ahead and build up supplementary savings.

Tax solutions for topping up your pension

Luxembourg encourages individual pension savings through tax advantages. Premiums paid into certain life insurance contracts are deductible as special expenses, up to a ceiling set by law. This enables the self-employed to reduce their immediate tax burden while building up additional capital to supplement their statutory pension.

The Pension Plan for Professionals from Baloise

Among the solutions available, the Pension Plan for Professionals from Baloise stands out for its flexibility and its ability to meet the specific needs of the self-employed and freelancers.
With this product, the self-employed person can:

  • build up supplementary and additional capital to top up their statutory pension,
  • benefit from tax advantages on contributions and premiums paid,
  • declare these amounts as special expenses,
  • adjust their savings effort according to their income and financial capacity,
  • prepare for retirement with complete peace of mind within a clear and protective contractual framework.

Discover the product here: Pension Plan for Professionals.

Practical tips for preparing for retirement when you are self-employed
Regularly assess your entitlements with the CNAP

Every self-employed person can request a career statement from the CNAP. This document summarises the years of contributions and accrued entitlements and makes it possible to check whether the career record is complete or if there are missing periods.

Plan ahead for periods of reduced activity

The self-employed may experience fluctuations in income or go through periods of economic hardship. It is therefore essential to anticipate this and, if possible, maintain regularity in contributions. Certain periods can be made up through voluntary contributions.

Combine statutory pension and private savings

The self-employed need to think of themselves as their own employer: they must ensure that their future income will be sufficient. Combining the first pillar (statutory pension) with the third pillar (supplementary savings) is the best strategy to safeguard their future.

 

Preparing for retirement as a self-employed person or freelancer in Luxembourg cannot be improvised. Although the Luxembourg system offers a solid foundation through the statutory pension (1st pillar), it is necessary to focus on individual savings. Planning ahead, regularly assessing your entitlements with the CNAP and setting up a suitable pension savings solution are key to securing your standard of living. The sooner you take action, the more you will benefit from tax advantages and increased capital for the future.

FAQ – Retirement in Luxembourg for the self-employed and freelancers
What is the minimum pension in Luxembourg?

The Grand Duchy guarantees a minimum pension to insured persons who can show a full career (at least 40 years of insurance). It is granted only on application to the CNAP. In 2025, it corresponds to around 90% of the minimum social wage, adjusted regularly in line with the index..

Can a self-employed person continue working after retirement?

Yes. It is possible to combine a pension with professional activity, subject to income conditions. Before the age of 65, the combination is limited by a ceiling (generally one third of the minimum social wage); after 65, there is no longer any limit.

Can I buy back contribution years as a self-employed person?

Yes. The Luxembourg system allows, under certain conditions, retroactive contributions for certain periods (e.g. studies, activity abroad) and, where applicable, the regularisation of missing periods.

Do freelancers pay more contributions than employees?

In proportion, the rate is the same (24%). The difference is that the self-employed person pays the full amount, whereas for an employee the cost is shared. This rate covers retirement as well as sickness, incapacity for work and dependency.

What tax advantages are available for the self-employed?

Premiums paid into a pension savings scheme, such as the Pension Plan for Professionals from Baloise, are deductible as special expenses within the limit set by law. This immediately reduces tax in Luxembourg, while building up additional capital for the future.