Retiring In Austria: A Viable Option?

Austria is a popular retirement destination for expats, with its high quality of life, low crime rate, affordable cost of living, excellent social security system, and stunning natural scenery. The country offers a range of benefits to its citizens, including accessible healthcare and generous pension schemes. However, before planning to retire in Austria, it is important to consider factors such as the cost of living, the pension system, health insurance, and tax policies. This guide will provide an overview of the key considerations for retiring in Austria, including eligibility criteria, visa requirements, and the best places to retire in the country.

Visa requirements

Austria does not offer a specific retirement visa but there are other options available to retirees. To retire in Austria, you must obtain a residence title called a "settlement permit except gainful employment". This is a type of residence permit issued to financially independent individuals. It is important to note that there is a limited number of settlement permits issued annually, so it is crucial to ensure the availability of a quota place before applying.

To be eligible for the settlement permit, you must meet both general and special requirements. The general requirements include having a regular monthly income, such as a foreign pension, income from assets, savings deposits, or company shares, equivalent to the standard rates of the General Social Insurance Act (ASVG). Additionally, you must have sufficient means of subsistence, with a fixed and regular income to support yourself without relying on public social benefits.

Special requirements include having valid health insurance coverage that provides benefits in Austria and covers all risks. You must also have customary accommodation according to local standards, with legal title to accommodation that is adequate for your family.

The settlement permit is typically issued for a limited period of 12 months. During this time, you are not permitted to engage in any gainful employment or activity. The cost of living in Austria can vary depending on your chosen city, with Vienna and Innsbruck being the most expensive. However, overall, the country offers a high quality of life, excellent social security, low crime rates, and an affordable cost of living, making it a desirable retirement destination.

Cost of living

Austria is considered an expensive country, but the quality of life it offers makes it worth the expense. A single person can expect to spend around $900 per month on necessities, excluding rent. For a family of four, the estimated monthly costs are about $3,020. The cost of living in cities like Vienna and Innsbruck is notably higher than in other parts of the country. However, these cities are still 10-30% less expensive than major cities in neighbouring France and Germany.

If you're looking for more affordable options, Graz and Klagenfurt are excellent alternatives. Graz, located in front of the Alpine area, is one of the most affordable cities in Austria. It offers beautiful landscapes, a rich cultural heritage, and a vibrant nightlife. The monthly cost of living in Graz is approximately $2,310, including $652 for rent.

Klagenfurt, set on the shores of Lake Wörthersee, combines outdoor living with an urban lifestyle. Surrounded by lush greenery and the Alps, it offers a serene environment. The monthly cost of living for an individual retiree in Klagenfurt is around $2,540, including $695 for rent.

For nature lovers, Zell am See, nestled in the Austrian Alps on Lake Zell, is a charming town. With its pristine air and water, it resembles a health resort. Depending on your lifestyle, monthly living expenses in Zell am See can range from $1,500 to $2,500.

Sankt Pölten, a picturesque retirement haven in the Lower Austrian countryside, offers a high quality of life. Nearby attractions include the Wachau Valley, a UNESCO heritage site, and the Danube River. The average monthly cost of living in Sankt Pölten is $2,144, with $741 allocated for rent.

It's important to note that Austria is currently facing a housing crisis, with significant declines in housing prices, especially in Vienna. This may impact your retirement plans and budget, so it's advisable to stay updated with the latest information.

Healthcare

Austria has a two-tier healthcare system, with both public and private healthcare sectors. The country's healthcare system is excellent, affordable, and accessible for everyone.

Public healthcare is compulsory for all residents, including foreigners, and is deducted directly from wages. It is free for people with disabilities, students, and retired people, or those who make under a certain income. Patients might be required to pay for some treatments, but part of the costs will be reimbursed by the health insurance fund. If you are employed, your employer will automatically sign you up for healthcare insurance. If you are a pensioner, you must first register as a resident in Austria and then take out voluntary insurance. You can also add your dependents to your insurance plan. Once you have registered, you will be given a European Health Insurance Card (E-card), which grants you access to public healthcare services in 27 European Union countries.

Private healthcare is also available in Austria for those who would prefer not to use public healthcare. This means zero waiting times, a larger choice of physicians, clinics, and hospitals. Most individuals who take out private health insurance use it to supplement their public insurance.

Austria has a public-funded healthcare system that offers free access to healthcare services for low-income or no-income citizens. However, others have to pay a small amount in social contributions.

Pension schemes

Austria offers two types of pensions: contributory and non-contributory. In the case of contributory pensions, the employer deducts 10.25% of the employee's gross income as their contribution and adds 12.55% as their own contribution. For non-contributory pensions, the government contributes to the pension of certain citizens. To qualify for a pension, an employee must contribute a minimum of 15 years of their income.

If you have contributed to a pension scheme in other EU or EEA Member States, you don’t need to claim your pension separately. You simply need to indicate this with your insurance provider in Austria, and they will sort out the approval process between states. This applies to EU Member States and Switzerland, Liechtenstein, Norway, and Iceland.

For EU nationals moving to Austria, pensions can be paid directly into a new Austrian bank account. For UK citizens, the Qualifying Recognized Overseas Pension Scheme (QROPS) allows the transfer of pension rights and provides an option for where to invest the pension fund. The jurisdiction of choice for Austrian residents is usually Malta, due to its highly regulated, sophisticated tax system, and its status as an integral EU member.

For non-EU citizens, there is no such policy. However, Austria has social security agreements with several countries, including Canada and the United States, which cover pension insurance for citizens with employment within Austria.

Taxes on Pension Funds

Austria operates a pay-as-you-go tax system, which means that tax brackets are defined by how much is earned in a year. The pension fund is not subject to tax on investment income earned on employer or employee contributions, so investment income is tax-exempt.

Social clubs

Austria is a very senior-friendly country, offering generous discounts to pensioners. One such example is the senior travel discount, which allows anyone above the age of 64 to travel on Austrian trains at a discounted rate. This offer will be extended to those aged 65 and above from 2022 onwards.

If you are a senior living in Vienna and looking to join some social clubs, a great place to start is the Pensionistenklubs. These senior citizen centres are found all over the city and offer plenty of socialising and entertainment opportunities. Activities include card and board games, dance events, lectures, and qi gong (similar to tai chi). Most operate every afternoon during the week, and there are usually no registration or membership fees.

The AWA of Vienna is another international women's group that organises monthly English-speaking activities. There is an annual bazaar, as well as regular meetups, country walks, and educational activities. The annual membership fee is €94, but this is half price for seniors (over 60).

The Rotary Club of Austria is a worldwide organisation that fosters friendships through weekly meetings. The Rotarian world is united by the principle of membership independence of gender, occupation, culture, and religion.

Frequently asked questions