40-year-olds will be surprised. This is how much they have to earn to have 5,000. PLN pension
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If you were born in the 1980s, you're screwed. We have proven this at Business Insider Polska many times. Experts warn that in old age, this generation's pension will constitute less than one third of their salary. Women are in a much worse situation.
Below, we have calculated, using specific examples, what today's 40-year-olds can expect in 20 years.
Read also in BUSINESS INSIDER
The belief that “it will work out somehow” is very common among today's 30- or 40-year-olds. This is shown by the latest research commissioned by the Chamber of Commerce of Pension Companies, which we described last week in Business Insider Polska.
Misconceptions about pensions
In short: 40-year-olds estimate their retirement at 70%. last salary. And almost half of them are under the illusion that their benefit will even constitute 95-100%. their salaries.
However, this will not be the case. Below we show what people born in the 80s and 90s can expect when they get older.
European Commission forecasts say that the so-called the replacement rate will be 32.2% in 2040, and ten years later only 27.4%. Polish data are even more pessimistic.
The impact of lowering the retirement age on the amount of pensions.
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ZUS
The ZUS forecast says that in 2050 there will be 16.8 million working people and almost 12 million retirees in our country. Not three, but less than 1.5 employees will have to contribute to the benefits of one senior citizen – as today.
We wrote about it in a separate article in Business Insider Polska.
This is what Poland's age structure will look like in the coming decades.
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ZUS
It will be even worse ten years later, when the youngest millennials retire. There the proportions will be 15.3 to 12.3 million people.
The conclusion seems simple. We cannot count on a pension from the state system, because it will be difficult for us to live on it.
Such earnings will amount to PLN 3,000. PLN pension
Łukasz Kozłowski, chief economist of the Federation of Polish Entrepreneurs and member of the supervisory board of ZUS, calculated how much a 40-year-old should earn today so that he can count on a decent pension in the future.
However, the term “worthy” is very subjective, so in the table below we will find amounts from PLN 2,000 to PLN 8,000. zloty. Today, approximately 85% of people receive benefits in this range. all retirees.
Kozłowski explains that he made the following assumptions in his analysis:
- The real increase in our remuneration in the following years will be 1.5%. annually
- Real indexation of pension capital at the level of 3%. annually
He used life tables in force from April 2024 in his calculations – This means that the simulation ignores the fact that in the future we will live longer, so pensions will be lower because of this. It is difficult to precisely determine how much life expectancy will change over the next 30-40 years, explains the expert.
The last assumption is that an example 40-year-old man has already accumulated some capital in ZUS over the course of several years of his professional career. Kozłowski assumed that it was exactly PLN 131,428.23which consists of PLN 84,606.54 on the ZUS account, PLN 34,309.69 on the ZUS sub-account and PLN 12,512 on the OFE account.
Where do such amounts come from? — These values are based on ZUS data regarding average account balances and subaccounts, as well as KNF data on average account balances of OFE members – explains the economist.
— Calculating the potential pension of a person aged 40 is difficult because it depends not only on our future earnings, but also on how much we earned (and what contributions we paid – ed.) in the past. This is of course an individual matter, so the actual result may be slightly different for each person – he adds.
| expected pension amount | This is how much women should earn at the age of 40 | This is how much men should earn at the age of 40 |
|---|---|---|
|
PLN 2,000 |
PLN 3,998 |
PLN 1,596 |
|
PLN 3,000 |
PLN 7,628 |
PLN 3,744 |
|
PLN 4,000 |
PLN 11,257 |
PLN 5,893 |
|
PLN 5,000 |
PLN 14,886 |
PLN 8,041 |
|
PLN 6,000 |
PLN 18,516 |
PLN 10,189 |
|
PLN 7,000 |
PLN 22,145 |
PLN 12,338 |
|
PLN 8,000 |
PLN 26,775 |
PLN 14,486 |
Retirement of current 40-year-olds. The difference between women and men is huge
The above amounts show that in retirement, 40-year-olds will have to get by on much less than half of their salary. Especially women. Even if they earn PLN 15,000 today. PLN per month, then in their old age they will only be able to count on just over PLN 5,000. PLN pension. A man with such earnings will receive over PLN 8,000. PLN benefits from ZUS.
The difference is colossal. All because he has been working five years longer. So he saves his contributions for five years longer and automatically receives his pension for five years less. Pure mathematics.
It is worth emphasizing, however, that if a woman decided to work until the age of 65 (and not the statutory age of 60), the last column in the table above would apply to her.
— The results of my calculations clearly show how important the age at which we retire is for the amount of our pension. In many cases, to achieve a certain pension amount, we can earn even twice as much if we retire 5 years later. This is especially important in the case of women, who will find it difficult in many cases to obtain a pension higher than the minimum in the future if they do not decide to retire later, explains Łukasz Kozłowski.
Another way to increase your pension is to save money voluntarily and systematically. There are plenty of ways to do this. However, we wrote about this in another material on Business Insider Polska.
