If you're dreaming of a cushy retirement in Europe, Luxembourg might seem like the perfect spot: it has the highest pension in the European Union. On average, pensioners receive around 72% of their average wage, with a minimum of €2,244 per month for those who have contributed to the economy for 40 years. Compare that to France, where retirees get 58%, or Germany, where it's just 44% Sounds idyllic, right? Not so fast

Workers don't need more than a year of employment in Luxembourg to qualify for its pension system. People retire at 65, and 24% of all gross incomes goes into pension their fund, boosted by an 8% share each from employers, employees, and the government. In Germany, for comparison, contributions are 18.6%, shared between employers and employees only.

However, Luxembourg's pension fund is under strain: by 2027, deficits are projected, and by 2070, almost half the population could be retirees. In the past decades, Luxembourg's population and economy have been growing rapidly, allowing for such a generous pension system; recent figures, however, suggest the growth to slow down soon. The ageing population is just striking a little later than in other countries.