On the other hand, the net income of those retiring from outside the labor force will increase by an average of 10 per cent.
ETK stressed on Monday that the net income ratio does not reflect an individual’s actual income level; Retirees outside the labor force tend to have significantly lower incomes than those retiring from employment.
“If your [earned] income is small, you are also low-paid retired, ”Rantala summed up.
He recalled that the change in net income varies quite significantly on the basis of certain factors, as the net income of some retirees may fall significantly less and that of others by more than 21 per cent. The change is also not in the way of those retiring from outside the labor force, as some may have accumulated significant earnings-related pension savings, while others may have lived on social benefits for a long time.
The unemployed and other non-labor groups account for about a quarter of all retirees. When looking at retirees before they retire from the labor market situation, the average decline in net income is about 13 percent.
According to the ETK, the net income ratio has not changed much since the beginning of the 21st century, although the nature of the change in income may have changed.
“What is new is the increased freedom to choose. More flexible ways to retire have been introduced, giving people more freedom to choose when they retire and what their pension level will be, ”Rantala said.
He expects the transition to retirement to be longer and not as abrupt as usual in the future.
Aleksi Teivainen – HT
Source: The Nordic Page