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Design your
own pension
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Personal pension plan

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The retirement age influences your pension amount

Starting from 2021, you can create your personal pension plan:

  • choose the most suitable retirement time;
  • halt the pension payments, should you wish;
  • take out only half of your pension amount.

In the future, it is possible to retire up to five years before the official retirement age.

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To illustrate - if the official retirement age is 65 years and three months in 2027, a person aged at least 60 years and three months can retire that year. Assuming that the official retirement age rises to 65 years and four months by 2028, a person who wishes to retire five years prematurely must be at least 60 years and four months old in 2028

 

For those who wish to retire early, limitations apply on the years of pensionable service , so that the pension would not be too small. In order to retire early, one must comply with the following:

-          retirement up to one year before the official retirement age – at least 20 years of pensionable service;

-          retirement up to two years before the official retirement age – at least 25 years of pensionable service;

-          retirement up to three years before the official retirement age – at least 30 years of pensionable service ;

-          retirement up to four years before the official retirement age – at least 35 years of pensionable service;

-          retirement up to five years before the official retirement age – at least 40 years of pensionable service.

You can postpone retiring for as long as you like.

If you choose to retire early, your monthly pension shall be decreased a little. When you postpone the retirement, your eventual monthly pension shall be bigger.

In the future, the pension decreases and increases shall also depend on the life expectancy statistics, and the interest rate. Data that the corresponding calculations are based on will be updated yearly, on January 1st.

When you choose to retire early, or postpone your retirement, it is expected that the pension amount shall change as follows:

time of retirement time of retirement decrease/increase*
5 years earlier -22,98%
4 years earlier -18,98%
3 years earlier -14,6%
2 years earlier -10,04%
1 year earlier -5,14%
At the official retirement age 0,0%
1 year later 5,57%
2 years later 11,67%
3 years later 18,35%
4 years later 25,7%
5 years later 33,68%

* The average reduction and increase percentages for 2021 are based on 2020 data. The new percentages take effect on January 1 of each year.

The data in the table are presented as expected. Your personal reduction or increase percentage is determined by your year and month of birth and when your pension is awarded

Example 1: If your pension would be 500 euros but you decide to postpone retirement by five years, your monthly pension will presumably increase by 33.68%. Thus, your pension would be 500 + 33.68% = 668,4 euros per month.

Example 2: If your pension would be 500 euros but you decide to retire three years earlier, your monthly pension would decrease by 14,6%. Thus, your pension would be 500 – 14,6% = 427 euros per month.

 

NB! Retirement under favourable conditions shall remain in force. You have the possibility to retire early if you have at least three children, or raise a disabled child. Favourable pension conditions also apply on certain professions. If a person complies with the favourable pension conditions and decides to retire early, their pension shall not decrease. You might want to read more about the old-age pension under favourable conditions and pensions under favourable conditions for different professions

 

Suspending pension payments, or taking out only half of it

Starting from 2021, one can take out half of the pension, or suspend the pension payments altogether. In this case, the unused pension share shall increase in the same way as if you had postponed your retirement.

The percentage increase in the suspended part of the pension is formed according to your retirement age and the moment when you continue to receive the pension in full.

Example 1: Your official retirement age comes, but you wish to continue working part-time and take out only half of the pension that you are eligible for. In this case, half of your pension shall be “put on hold”. Now, assuming that in five years, you decide to retire completely. Then, an increase shall be calculated for half of your pension, predicted at 33,68% (see the table above).

 

Example 2: When you reach retirement age, you want to continue working part-time and also receive half the old-age pension - in which case half of the pension will be on hold. Your pension is 500 euros. Suppose one year of pension suspension gives it an increase of six percent and the pension is suspended from January to December. During this period, your pension is 50 percent lower, or 250 euros per month. The other half of the pension increases by an increase factor of six percent, which makes the suspended amount 15 euros. After one year, the amount suspended is EUR 250 + EUR 15 = EUR 265. We then add the suspended and non-suspended parties together. As a result, from January next year, the person's pension will be 250 euros + 265 euros = 515 euros..

 

You can change your mind or even halt pension payments once a month – or, 12 times in a calendar year. Your choice shall take effect from the following calendar month.

For example, if you file an application on January 5th that you wish to get full pension payments, or only half of the pension, or that you want to halt the pension payments altogether, the corresponding change will take effect from the following month – February 1st.

 

Your decisions will change the amount of pension you were originally granted