Will you retire soon? Use the calculators at Tyoelake.fi to estimate how the indexes will affect your pension
Are you thinking of whether to claim your pension before the end of this year or to continue working past the turn of the year? Our renewed pension calculators can assist you in your planning. Use the calculators at Tyoelake.fi to assess the effect of the index increase on your pension.
The index issue applies if you are planning to retire on an old-age pension or a partial old-age pension in 2023 or 2024. The pension calculator and the partial old-age pension calculator provide two alternative price levels if you plan to retire in 2023:
- Current price level
- Assessment of index effect (nominal price level)
If you select “Assessment of index effect (nominal price level)”, you will see not only the estimated amount of your starting pension but also your index-adjusted pension amount for 2024 that takes into account the projected change in the price level.
For example, you can compare the amount of your pension if you retire in December 2023 or January 2024. For comparable results, select the nominal price level in all calculations.
- Calculate how much your monthly pension would be if it were to start in December 2023 and how much your index-adjusted pension that would start in January 2024 would be.
- Calculate how much your pension that would start in 2024 would be by selecting a higher age at retirement.
- Compare the results.
The partial old-age pension calculator cannot calculate your index-adjusted pension amount if your old-age pension begins in 2023 or in January 2024 since, in that case, you will no longer be paid a partial old-age pension in 2024.
Note the benefits of continued working
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 your career earnings up to the level of the year of your retirement. Both indexes are adjusted in January each year.
The index development may slightly affect when it is most favourable for you to retire. However, the difference between the earnings-related pension index and the wage coefficient in 2023 and 2024 is very small. This means that the timing of retirement does not make as big a difference now as it did at the turn of 2022-2023. At the end of August 2023, the Finnish Centre for Pensions projected that the difference between the indexes will be around 0.5 percentage points. It is likely that the difference will be even smaller.
When you plan the timing of your retirement, also consider the benefits of continued working. Continuing to work may be economically beneficial. If you postpone the start of your retirement, the postponement will add an increment for late retirement to your pension. At the same time, you will earn even more pension for your earnings from work.
The Ministry of Social Affairs and Health will publish the confirmed earnings-related pension indexes for 2024 at the end of October.