Indonesia raises retirement age to 59

1 min readUpdated May 30, 2025Jan 10, 20256:42 AM

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Indonesia will raise the retirement age for workers to 59, effective this year, in accordance with a government regulation on the Implementation of the Pension Guarantee Program.

A regulation issued in 2015 set the retirement age at 56, with a provision for gradual increases. Starting Jan. 1, 2019, the retirement age was raised to 57, with plans for it to increase by one year every three years until reaching a maximum of 65.

As outlined by the regulation, the retirement age will increase to 59 beginning in January 2025 and remain in effect until 2028.

The updated retirement age also serves as a reference for workers registered with the Employment Social Security Administration Agency (BPJS TK) to claim their pension benefits.

The gradual increase reflects Indonesia’s efforts to address demographic and economic changes, ensuring the sustainability of the pension system while promoting the financial security of the country’s aging workforce.

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What this means

This incremental rise in Indonesia’s retirement age to 59 is a net positive for retailers, extending the earning and spending lifespan of a significant consumer demographic. Unlike market entries or store expansions by Panpuri or Miniso, this government regulation subtly enhances the fundamental market conditions. It bolsters the sustainability of the pension system, reducing immediate financial pressure on a maturing workforce, which translates to sustained discretionary spending. This move pressures retailers to consider product relevance for an older, financially stable consumer base. We anticipate brands will increasingly tailor offerings to this demographic’s prolonged engagement in the workforce, especially as the age reaches 65 in the coming years.

Aiko Tanaka · Retail News Asia newsroom

Questions & Answers

What is the new retirement age for workers in Indonesia and when does it take effect?

The retirement age for workers in Indonesia will be raised to 59, starting in January 2025. This new age will remain in effect until 2028, as per the government regulation.

How has the retirement age in Indonesia changed over time according to the regulation?

A 2015 regulation initially set the retirement age at 56, with gradual increases planned. It rose to 57 in January 2019, with further plans for a one-year increase every three years until it reaches 65.

What is the primary reason behind Indonesia's decision to gradually increase the retirement age?

Indonesia is increasing the retirement age to address demographic and economic changes. This aims to ensure the long-term sustainability of the pension system and promote financial security for its aging workforce.

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