#How much more can one's pension increase by retiring one year later?# This is a topic of great concern for many people under the backdrop of delayed retirement. According to the current pension benefit calculation model, the pension benefit follows the principle of "more contributions, more benefits" and "longer contributions, more benefits." There is also a rule that retiring later can lead to more benefits. Today, let's take a look at the pension calculation formula to see exactly how much more money one's pension can increase by retiring one year later.

How is the pension calculated?

Currently, the basic pension benefits from participating in the pension insurance mainly consist of two parts: the basic pension and the personal account pension. The specific calculation formula can be referred to in the figure below:

① The impact of retiring one year later on the basic pension part:

For simplicity, we must first clarify that by retiring one year later, one must continue to pay social insurance for another year. After all, it is mandatory and obligatory for employees to pay social insurance, so the contribution period will be increased by one year.

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The increase in the contribution period is not easy to determine the proportion of increase due to the uncertainty of the initial contribution period. If we take a moderate contribution period of 30 years, then increasing the contribution period by one year will increase the pension by about 3%.

In addition, the average contribution index generally ranges from 0.6 to 3, and we also assume that the average contribution index is 1.

Finally, the average social wage of the year before retirement will also increase due to different years. Assuming the growth rate of the social average wage for one year of delayed retirement is 4%.

After calculation, the original normal retirement would receive 30% of the X-year social average wage. Delaying retirement by one year would result in receiving 31% × 104% of the X-year social average wage, which is an increase of 7.47%.The impact of delaying retirement on the personal account pension portion.

The first change brought about by delayed retirement is the increase in the balance of the personal account. The money in the personal account will also accrue interest for an additional year. Assuming the accounting interest rate is 3% (which is generally lower than the growth rate of the average social wage), the balance will first increase by this amount.

Additionally, by contributing for an extra year, the annual pension insurance payment will also increase the balance of the personal account. The monthly amount recorded in the personal account is 8% of the contribution base. Since it is a 100% tier contribution, it is equivalent to recording 96% of the monthly average social wage into the personal account over a year.

If retirement is at the age of 60, this year's contribution can form a pension equivalent to 0.69% of the monthly average social wage. With 30 years of contributions, one can receive 20.7% of the average social wage. In reality, due to lower contribution bases in the past and accounting interest rates lower than the growth rate of the average social wage, the actual treatment level will be somewhat lower. Suppose originally one could receive 15% of the X-year average social wage.

Delaying retirement by one year will also cause the number of months for pension payment to decrease. However, relatively speaking, the degree of change is irregular. For example, changing from 50 to 51 years old, and from 60 to 61 years old, the former has a smaller change, while the latter has a larger change.

Taking the example of changing from 60 to 61 years old for retirement, the number of months for pension payment decreases from 139 to 132.

Delaying retirement by one year, the personal account balance of the pension increases by 3%, and with an additional year's pension insurance payment, after the number of months for pension payment becomes 132, it can be concluded that the personal account pension is 17% of the X-year average social wage, an increase of 13.3%.

Considering the total pension benefits, originally one could receive 45% of the X-year average social wage, but now one can receive 49.24% of the X-year average social wage, with a pension growth rate of 9.42%.

Is the pension received upon early retirement higher or upon delayed retirement?Some people might think that retiring one year earlier means they can receive one more year of pension. So, wouldn't the total amount of pension they can receive increase?

If one retires at 60, assuming the pension is 4,500 yuan, and based on the average life expectancy of 78.2 years in our country in 2021, they can receive a total of 982,800 yuan.

If one retires at 61, the pension can be received at 4,924 yuan per month, and the total pension amount can reach 1,012,000 yuan.

In fact, retiring at 61 means that the expected life span during which one receives the pension will be longer than at 60. Additionally, considering the increase in average social wages and prices, the amount of pension increased by retiring later will also be more, and the total pension amount that can be received overall will be even more.

If we look at the perspective of ensuring a secure old age, it is indeed more cost-effective to retire later. #Top Headline Creation Challenge#