Working longer pays off

The longer you work and the later you retire, the higher your pension will be.

Your old-age pension will increase by 0.4% for each month that you retire late, that is, for each month past the month in which you reached your retirement age. The increase is calculated on the entire amount of pension that you have earned throughout your working life until the end of the month before you start drawing your pension.

The increase is not linked to working – your pension will rise regardless of whether you work past your retirement age. There is no upper age limit to the increase for late retirement – you will get it until you finally retire.

If you work past your retirement age, you will get both the increase for late retirement and earn a new pension at a rate of 1.5% of your annual earnings from work. You will earn a new pension until you reach the age at which you can no longer take out pension insurance (roughly five years past your retirement age). After that, you can continue to work, but you will not earn a new pension for that work.

Use the pension calculator to estimate how your pension will grow if you continue working and retire late.

How your old-age pension is calculated if you retire late, example at age 65
Your date of birth 15 June 1957
Your retirement age 63 years and 9 months
Your retire on 1 July 2022
Number of months between your late retirement date and your retirement age 15 months
Total percentage increase to your monthly pension payment 15 months x 0.4% = 6%
The amount of pension you have accrued (at the end of the month before you start drawing your pension) €1,650/month
Your pension when you retire on 1 July 2020 €1650 + (€1,650 x 6%) = €1,749/month

 

Your target retirement age

If you were born in 1955 or later, your birth year will not only have its own retirement age but also a computational target retirement age. It is slightly higher than your retirement age.  For example, if you were born in 1955, your target retirement age is 64 years and 1 month.

By working until you reach your target retirement age, you can offset the effect of the life expectancy coefficient. In practice, it means that the increase for late retirement nullifies the reducing effect of the life expectancy coefficient.

Calculate your pension

Use the pension calculator to estimate how much pension you will receive.

Enter the salary as an integer, for example. 2500.
Retirement age ?

Your retirement age is the first possible age at which you can retire on an old-age pension.

- Pension estimate/month - €/month
Your target retirement age ?

Because people are living longer, the life expectancy coefficient has been introduced. It reduces the pension you receive. To offset the effect of the life expectancy coefficient, you need to work an additional length of time. This later retirement age is called your target retirement age.

- Pension estimate/month - €/month

Check how your selected retirement age affects your estimated pension amount.

Chosen retirement age

The selected retirement age is 63 years and 0 months Estimate of your pension - €/month
On the calculator

This calculator will calculate the amount of your earnings-related pension only. If you get a low earnings-related pension, you may qualify for a national pension. The calculator does not calculate your partial old-age pension or your disability or years-of-service pensions.

The calculator calculates your pension based on the wage you have entered into the calculator and the laws that are valid in 2018. To get an estimation that is as close to the truth as possible, enter the amount of pension you had earned by the end of 2017. You can find that information on your pension record.

Your future pension amount greatly depends on how your own earnings develop and how the general earnings and prices develop.  In the calculator, your earnings are unchanged throughout the calculation period. The general wage and price level also remains the same in the calculator.

Your final pension cannot be calculated until just before you retire. At that point, the wage and price levels will affect the amount of your pension through the wage coefficient. The wage coefficient is used to adjust the earnings that form the basis of your pension to the level of the year in which you retire.

If you are a wage earner, you will start to earn a pension as of age 17. If you are self-employed, you will start to earn a pension as of age 18. The calculator will calculate your earned pension as of age 17. This calculator calculates your earned pension under the assumption that you will not retire early. The calculator calculates how much pension you have earned if you were born in 1949 or later. You can earn a pension until the age of 70, which is why you can use this calculator to calculate your pension to the age of 70 at the most.

The calculator calculates your pension under the assumption that the earned pension you have entered into it has been adjusted with the life expectancy coefficient. The calculator does not calculate the increase for late retirement.

The calculator states your target retirement age if you were born in 1987 or earlier. If you were born in 1988 or later, your target retirement age would be higher than the age at which your insurance obligation ends and higher than the age at which you can no longer earn more pension.

The extended life expectancy that affects the projected retirement ages and the life expectancy coefficient are based on the population forecast of Statistics Finland.

On terms and definitions

Retirement age
Each birth year group has its own retirement age. The retirement age for those born in 1965 and later is based on the currently estimated life expectancy. The projection is based on Statistics Finland’s population forecast for 2015, which has been updated at the Finnish Centre for Pensions.

Target retirement age
The target retirement age is the age at which the reducing effect of the life expectancy coefficient has been offset by the increment to your pension for late retirement. The target retirement age will be confirmed when you turn 62. If you are younger than that, it is an estimate.

Earning a pension and age at which insurance obligation ends
As of the beginning of 2017, you earn pension at a rate of 1.5 per cent of your annual gross wages. From 2017 to 2025, you will accrue a pension at a rate of 1.7% of your annual gross wages if you are between 53 and 62 years old. If you retire late (after you have reached your retirement age), your pension will be increased by an increment for late retirement (0.4% for each month that you retire late).

The age when you stop paying pension insurance and no longer accrue a pension will rise from 68 to 69 (for those born between 1958 and 1961) and 70 (for those born in 1962 and later).

Life expectancy coefficient
The pension you have accrued will be adjusted with the life expectancy coefficient. It is determined depending on your year of birth. The life expectancy coefficient will be confirmed when you turn 62 years. If you are younger than that, it is an estimate. The projection is based on Statistics Finland’s population forecast for 2015, which has been updated at the Finnish Centre for Pensions.