People usually think about retirement, that is, if they don’t know exactly long in advance that they will retire at the exact time they are entitled to it. Today, however, it is quite fashionable to work longer than necessary. Either because you like your job, you still manage it well, or because you don’t want to give up an attractive income and, on top of that, improve your retirement a little more.
An unexpected advantage
But few people think about how to choose the best time for retirement to make a financial profit. The truth is that pension payments are strictly regulated by various tables, ratings, etc. If you are familiar with this system, you can receive a higher pension for the rest of your life than if you don’t know it.
In most cases, it is more advantageous to postpone retirement to the following year, when it is calculated according to the new parameters. But the unique situation this year meant that this was not the case. So if you have this option and start your retirement this year, the June and September extraordinary enhancement will apply retroactively to you. And again, your pension will be increased from January next year by the standard valuation.
As reported by the Novinky.cz server on a simple example. Take a person born in June 1959. Throughout his life he has received a slightly below average salary, as is the case for most people in the Czech Republic. If he retires on the last day of this year, he will be entitled to a very decent pension of 20,890 crowns. But that is not all. From January the valuation will increase it again, to 21,897 crowns. However, if the same person retired the next day, i.e. January 1, 2023, they would receive a pension of 19,505 crowns. The difference amounts to almost 2,400 crowns. Furthermore, no one will cancel it and it will continue to be increased.
Use a trick
In that case, early retirement is also paid, if retirement doesn’t exactly work for you this year. In that case, you don’t even have to stop working. It will be enough to use the institution of the so-called calculation gap, when already this year the pension is granted to you, but in reality it will be paid later, but to a greater extent.
As you can see, you can do interesting things with pensions. If a person is able to navigate the system, he can secure a much higher-value pension for decades to come. He doesn’t need anything extra for that.
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