Lithuania (LT)
Lithuania is the largest and most southerly of the three Baltic states, a semi-presidential EU republic celebrated for its remarkably preserved Baroque capital Vilnius (UNESCO World Heritage), dramatic coastal dunes at Neringa (also UNESCO), vibrant startup and fintech ecosystem (home of Revolut HQ, Vinted, Nord Security, and Hostinger), rapidly rising living standards, and a resilient population with deep cultural roots stretching back to one of the last pagan civilisations in Europe to adopt Christianity.
Retirement & Pension in Lithuania
State pension, contribution refunds, private pension vehicles, and international agreements.
Lithuania operates a three-pillar pension system administered primarily by Sodra. The 1st pillar (state pension) is a PAYG system collecting contributions from current workers and paying state pensions (valstybinė socialinio draudimo pensija). The 2nd pillar is a funded individual accumulation account where employees divert 3% of their salary to a private pension fund, supplemented by a state top-up of approximately 1.5% of the average wage (€33.49/month in 2026). Note: Lithuania's 2026 pension reform significantly liberalised the 2nd pillar — automatic enrolment has been replaced by voluntary participation, and during 2026–2027 participants can opt out and withdraw up to 25% of accumulated savings (or the full balance for those with €5,400–€10,800 saved). The 3rd pillar consists of voluntary investment life insurance products (investicinis gyvybės draudimas) and pension funds. Lithuania's retirement age reached 65 years in 2026 for both men and women.
State Pension
The Lithuanian state pension (valstybinė socialinio draudimo senatvės pensija) consists of two parts: (1) The basic pension component (pagrindinė dalis) — a flat-rate amount paid to all qualifying contributors regardless of income level (approximately €255/month in 2026). (2) The additional pension component (papildoma dalis) — earnings-related, based on the number of Sodra insurance years and the coefficient calculated from your lifetime insured income relative to the national average. Combined, the average state pension is approximately €550–700/month in 2026. Contributions to the 2nd pillar pension fund reduce (slightly) the amount that accumulates in the 1st pillar, but the combined 1st + 2nd pillar total is higher overall.
65 years for both men and women (from 2026). Early retirement at 60 possible with 35+ years of contributions (reduced pension). Deferred retirement (after 65) increases pension amount by 8% per year of deferral.
Minimum 15 insurance years (draudimo stažas) required to receive any state pension. With 15 years, the basic component only is paid. For the full additional component, at least 40 insurance years are beneficial (longer = more).
Log in to sodra.lt with Smart-ID to view your accumulated pension record, insurance years, and projected pension estimate. The Sodra portal shows your personal pension coefficient and calculates projected retirement income. Very useful planning tool.
Lithuanian state pension can be paid to a bank account in any country — inside or outside the EU. Apply to Sodra (sodra.lt) with your foreign bank account details. EU social security coordination rules (Regulation 883/2004) ensure your Lithuanian pension years count toward benefit qualification in other EU countries and vice versa. Bilateral agreements with the USA, Switzerland, and other countries also facilitate pension portability.
Pension Contribution Refund on Leaving Lithuania
Non-EU citizens who permanently leave Lithuania and have less than 15 years of Sodra insurance may apply for a refund of their pension contributions (grąžinamieji valstybinio socialinio draudimo įnašai) in some circumstances.
EU/EEA citizens who leave Lithuania — EU Regulation 883/2004 preserves your accumulated pension rights across EU member states. Your Lithuanian pension insurance years will count in any EU country. Refund is not available; instead, rights are preserved for payment at retirement age.
No waiting period — can apply after permanently leaving Lithuania.
For non-EU citizens: the pension contribution portion (a subset of total Sodra contributions). Health insurance and other social insurance contributions are not typically refunded.
Apply to Sodra (sodra.lt) with proof of departure from Lithuania, bank account details, and identity documents.
2nd pillar pension fund contributions are held in your personal investment account and remain your property regardless of where you live. They are paid out at retirement. If leaving permanently before retirement, contact your pension fund manager (Swedbank, SEB, Luminor, etc.) about options — early withdrawal is possible under specific conditions with applicable charges.
International Totalization Agreements
Lithuania participates in EU social security coordination under Regulation 883/2004 — pension insurance years in all EU/EEA member states count cumulatively. Bilateral agreements also exist with: USA (since 1999 — very important for US-Lithuanian dual-career families), Switzerland, Ukraine (for pre-2022 accumulation), and several other countries. Under totalisation, your total career contributions across countries determine benefit eligibility in each country proportionally.
Private Pension Vehicles
II Pillar Pension Fund
Pensijų kaupimas (II pakopa)Employed and self-employed persons who choose to participate (voluntary from 2026 reform). Strongly recommended for everyone under 50 who wants the state top-up benefit.
State top-up of 1.5% of the national average wage (€33.49/month in 2026) for participants contributing the standard 3% of their salary
The employee's 3% contribution is deducted from gross salary before GPM calculation — modest tax benefit. The state supplement is the main advantage.
Standard: 3% of gross salary. Contributions can be suspended for up to one year (extendable under 2026 reform). Additional voluntary contributions possible.
Fully portable — the accumulated capital belongs to you. Under the 2026 reform: participants may make a one-time withdrawal of 25% of savings (subject to 3% tax), or withdraw the full balance if savings are between €5,400–€10,800. Full pension access at retirement age without tax. Accessible at pensijukaupimas.lt.
Important 2026 change: automatic enrollment has ended. If you are not yet enrolled, joining is now voluntary — but the state top-up (€33.49/month) makes participation highly worthwhile. Choose from: Swedbank (largest), SEB, Luminor, Sodra PRISMA (state fund — lowest fees), INVL. Different risk profiles available. Switch between fund managers is possible.
Investment Life Insurance
Investicinis gyvybės draudimas (III pakopa)Anyone wanting additional tax-advantaged long-term savings, especially those in higher tax brackets.
No direct state subsidy but GPM deduction makes it tax-advantaged.
Contributions deductible from GPM (personal income tax) up to €2,000/year or 25% of taxable income (whichever is lower). The deduction creates real tax savings of €200–400/year for standard earners.
€2,000/year for maximum GPM deduction (no absolute maximum for contributions beyond the deductible amount).
Can be transferred or surrendered. Early surrender penalties apply in the first 5–10 years. At retirement: tax-free withdrawal.
Providers: Compensa Life, PZU Lietuva, SEB Life, Ergo Life, Gjensidige. Compare charges carefully — annual management fee (AMC) of 1–2% significantly impacts long-term returns. Best used for 10+ year time horizon.
Voluntary Pension Fund (III pillar)
Savanoriško pensijų kaupimo fondas (III pakopa)Those who want a pure investment fund approach to 3rd pillar saving without the insurance wrapper.
GPM deduction available — same as investment life insurance.
GPM deductible contributions up to €2,000/year.
No absolute limit; €2,000/year cap for GPM deduction.
Fully portable. Accessible at retirement. Early withdrawal possible with taxes.
Lower fees than investment life insurance in many cases. Available from Finasta, INVL, Luminor. Simpler product with fewer insurance components — better for those who only want the investment element.
Early Retirement Options
Early retirement available from age 60 for those with at least 30 Sodra insurance years (draudimo stažas). Pension is reduced by 0.4% for each month taken before the statutory retirement age. Those with 35+ years of insurance can retire at 60 with a smaller reduction. Workers in specific heavy labour categories (listed professions involving hazardous or physically demanding work) have reduced retirement age entitlements. Disability pension is available before retirement age for those with assessed incapacity.
Pension Gap Warning
Expats arriving in Lithuania in their 30s or 40s will not accumulate 40 years of Lithuanian Sodra contributions before retirement — this means a significantly reduced state pension from Lithuania. The average Lithuanian state pension (€550–700/month) is already not high for a comfortable retirement. Expats should actively plan their retirement income from multiple sources: 2nd pillar fund (start immediately), 3rd pillar investment life insurance (for tax benefits), property investment, and pension rights from previous countries (check totalisation). Use sodra.lt to model your expected Lithuanian state pension based on actual contribution history.
Useful Links
Retirement & Pension
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