Boosting Your Retirement Fund: Delay or Save?
Citizens in Russia have been informed about the legitimate methods to boost their pension benefits.
Contemplating ways to augment your retirement fund in Russia? Consider the options of delaying your retirement or partaking in long-term pension savings programs. This insight comes from State Duma Deputy Svetlana Bessarab, as reported by aif.ru.
The top strategy for beefing up your pension, according to Bessarab, is to postpone its initiation by persisting in official work and eschewing state payments. By deferring retirement, for instance, by 5 years, the fixed part of the payment can swell by approximately 40%. If deferred by 10 years, the fixed part doubles, as the coefficient can reach 2.11.
Bessarab added, however, that pensioners who continue to work can only increment their pension credits to a certain extent. Presently, over seven and a half million pensioners are still employed, but they typically receive both a pension and a salary, limiting their ability to boost their pension by a maximum of 3 credits per year.
An alternate route, Bessarab suggests, involves participating in voluntary pension insurance and long-term savings programs. In this process, both the state and often the employer aid the worker in forming voluntary savings. The program provides for state co-financing of up to 360,000 rubles.
But, there are other factors to consider. For instance, while veterans receive increased monthly allowances and preferential mortgage rates, the general population has more limited options for increasing pension size through personal contributions. Moreover, the Russian pension system primarily operates on a pay-as-you-go model, offering minimal opportunities for boosting pensions.
Remember, increasing pension size through delayed retirement or long-term savings plans depends on various factors, including your health, employment opportunities, and the availability of savings programs. Compare the benefits and drawbacks of each option to make an informed decision:
| Option | Benefits | Drawbacks ||-------------------|---------------------------------------------------------|------------------------------|| Delaying Retirement | Increased pension size due to additional years of work, continued income while working | Health risks, potential job insecurity, reduced leisure time || Participating in Pension Savings Programs (if available) | Additional retirement savings, potential for higher returns through investments | Limited availability in Russia, dependence on market performance |
In this context, delaying retirement might be a more accessible option for most Russians, given the limited availability of private pension savings programs. However, government initiatives for specific groups, like veterans, offer significant benefits and could serve as a blueprint for broader pension reforms.
In the context of boosting your retirement fund in Russia, the strategy of delaying retirement canresult in a significant increase in your pension, as the fixed part of the payment can swell by up to 40% if deferred for 5 years and double if deferred for 10 years. On the other hand, an alternate route involves participating in voluntary pension insurance and long-term savings programs, which can help build additional retirement savings. However, the availability of these programs may be limited in Russia.
