Desing your
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The quality of life in retirement age depends on your decisions today.

Imagine what your life could be like when you retire… Where do you live, what transportation do you use? What are your daily activities and hobbies? Are you employed or engaged in business? How is your health?

How much do you earn?

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The state pension alone, i.e. the first and the second pillar, may not be sufficient for the retirement period of your imagination:

  • for the low-wage employers, the state pension guarantees about 75% of the last wages;
  • for the medium-wage employers, about 40%; and
  • for the high-wage employers, only about 25%.

Already today, it is reasonable to start thinking about whether you could somehow increase your retirement income, so that your earnings would be sufficient for the desired life in retirement.

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For example:

  • How could you increase your monthly savings from your current income? See thoughts below
  • Move your savings to the third pension pillar. Read more on the website of Pensionikeskus.
  • Read more about investments on the website of the Financial Supervision Authority.
  • Consider whether you can continue working in your field or any other field when you reach retirement age and postpone the receipt of pension. This way, you will receive a higher pension later. Use the calculator to see how the amount of your pension increases if you postpone its withdrawal.
  • When you reach retirement age, work with a lower burden or start your own business and withdraw only half of the first pillar pension. Leave the rest and the second pillar pension to grow. Read more about the personal pension plan.
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Now go and see how much have saved for pension so far and how much your approximate pension will be in the future: the calculator on the website of eesti.ee.

Will the pension you have saved so far match your future plans? If no, then do not wait and take immediate action to improve the situation.

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Will the pension you have saved so far match your future plans? If no, then do not wait and take immediate action to improve the situation.

  • Keep track of your expenses for a month and evaluate with the help of a good friend whether you could cancel any expenses or reduce them.
  • Review you electricity, mobile, internet, and insurance plans and ask the service providers for more favourable ones. You can often find cheaper solutions if the whole family uses the services of one service provider.
  • Remember how you coped with a lower income before you started earning more. Think about what expenses have found their way into your life and whether they are really necessary?
  • Save a larger part of your wage increase, tax refund, etc. for your future self.

All permanent savings entail a double win: more money for the future and lower expenses for the rest of your life.

 

Working is beneficial at any age

Every euro of social tax paid on your wages will increase your future pension.

 

Working is beneficial after retirement

Working after retirement is useful for you, as the social tax paid by the employer increases your pension. The Estonian National Social Insurance Board takes into account the time employed as of 1 April each year and increases your pension.  Read more about the recalculation of the pension and the simultaneous indexation of pensions.

It is not required to notify the Estonian National Social Insurance Board of your employment or termination of employment, unless you have been granted an early retirement pension under the former system and you have not yet reached your retirement age. In this case, please notify the Estonian National Social Insurance Board of your employment by sending an email to info@sotsiaalkindlustusamet.ee.