Delaying retirement can significantly increase the amount of monthly payments. This was News.ru reported by Ivan Ermokhin, Researcher at the Gaidar Institute’s International Best Practices Analysis Department.
According to him, the current insurance pension system provides for special adjustment factors for citizens who continue to work after reaching retirement age and do not apply for a pension immediately.
“The amount of the old-age insurance pension is calculated based on accumulated pension points, the value of a single pension coefficient, and a fixed payment. If a person defers retirement, multiplier coefficients are applied to these indicators, which significantly increases the final amount of payments,” explained Ivan Ermokhin.
The economist gave a following example of a woman born in 1985 with 20 years of work experience and a monthly salary of Rb100,000 before personal income tax deductions. Under current law, she will be able to retire at age 60. In this case, her insurance pension will amount to approximately 22,200 rubles per month. If, however, she continues working for another five years and retires at age 65, her monthly payment will increase to Rb30,700. If she retires at age 70, her monthly payment will reach Rb45,400.
“Thus, retiring later ensures the highest future income. However, when making such a decision, one must take longevity risks into account,” the expert noted.
Ivan Ermokhin pointed out that average life expectancy in Russia is about 69 years for men and 79 years for women. Therefore, delaying retirement may not be beneficial for all categories of citizens.
The expert also pointed out that encouraging later retirement is part of a global trend. According to him, the aging population, especially in developed countries, is forcing governments to seek ways to extend the participation of older people in the labor market.
“Many countries use adjustment factors to increase benefits for those who continue working after reaching retirement age, and they are also lifting restrictions on combining work with receiving a pension,” said Ivan Yermokhin.
The gender gap in pension benefits remains a separate issue. According to the Organization for Economic Cooperation and Development (OECD), women receive pensions that are, on average, about 23% lower than those of men. Among the measures to reduce this gap, experts cite equalizing the retirement age for men and women, as well as providing credit for periods spent giving birth to and raising children.