According to an estimate by the Finnish Centre for Pensions, the earnings-related pension index will grow clearly more than the wage coefficient at the beginning of 2023. As a result, a person who retires in 2022 will get a higher index increment than a person who retires after the turn of the year, in 2023. The Ministry of Social Affairs and Health will publish the earnings-related pension indexes at the end of October.
Two indexes affect earnings-related pensions: the earnings-related pension index and the wage coefficient.
The earnings-related pension index ensures that the purchasing power of pensions in payment remains. The wage coefficient affects starting pensions: it brings the retiree’s career earnings up to the level of the year of retirement. Both indexes are adjusted annually in January.
Due to high inflation, the 2023 index adjustments will have an exceptionally strong effect on earnings-related pensions.
As a rule, the wage coefficient increases clearly more than the earnings-related pension index. This year, the opposite will be the case. It follows that a person who retires in 2022 will get a higher index increment than a person who retires after the turn of the year, in 2023.
The direction is the same also for the partial old-age pension.
“It is good to be aware of the index adjustments if you plan to retire at the turn of the year. Particularly this year, the effect will be significant, even if its difficult to project at this point in time just how big the effect will be,” says Economist Ville Merilä (Finnish Centre for Pensions).
Plan your retirement
You should plan your retirement based on your own situation. Go to your pension provider’s website or contact your pension provider’s pension Customer Service for more information on how to plan your retirement.
Claim your old-age pension about one month before you want to retire.
Pension calculators at Tyoelake.fi to be updated in early autumn
The current exceptional situation will be taken into account in the pension calculators at Tyoelake.fi in early autumn in the form of age group limits and instructions. This way we want to make sure that the calculators provide correct information on the effects of postponing retirement.
The Ministry of Social Affairs and Health will publish the earnings-related pension indexes at the end of October.More news