Working retirees on an old-age pension receive a clearly higher earnings-related pension than do others of their age. It would seem that work engagement and social relations rather than economic necessity entice retirees to work.
In 2014, retirees on an old-age pension who worked received a monthly earnings-related pension of approximately 1,900 euros. The average earnings-related pension of all retirees under the age of 68 was an ample 200 euros less, approximately 1,670 euros per month.
This would suggest that a meager pension is not the main incentive for working in retirement. The underlying reasons for working in retirement may be, for example, the social network offered by work, one’s own interests and motivation. For some, however, the additional income is much needed and the central reason for working in retirement.
“Money does make a difference, but the other reasons may weigh more. We must also remember that these people are in demand on the labour market. They have the skills and working capacity needed and used,” explains Jari Kannisto, Development Manager at the Finnish Centre for Pensions.
In 2014, roughly 58,000 retirees (as many men as women) on an old-age pension worked.
Occasional and Part-time Work
Work done alongside an old-age pension is often irregular and part-time. On average, retirees worked for seven months. The average monthly earnings for the months at work was 1,100 euros.
In 2014, one third (ca 18,000) of the retirees on an old-age pension under the age of 68 worked throughout the year. More than half of them were men. Both the average pension and the average earnings were slightly higher for this group than for all working retirees.
Growth of working in retirement stalled
Working in retirement has increased as of the year 2007. After 2010, the growth has stalled as working has no longer increased in recent years.
A main part of the growth can be explained by the baby boomers. If we look at the growth relative to the size of the age group, the growth continues, but at a much more moderate pace.
“Although we talk a lot about how working in retirement has become more common, the changes in recent years have been small. At the same time, the number of people working past their general retirement age has grown more. An increasing number of people defer retirement and continue working past their earliest general retirement age,” Kannisto points out.
Eläkkeellä ja työssä: Tilasto eläkeläisten työnteosta vuosina 2007–2014. Eläketurvakeskuksen tilastoja 9/2016 (available only in Finnish)
Jari Kannisto, Development Manager, tel. +358 29 411 2232, +358 50 368 7559, jari.kannisto(at)etk.fi