Most people would agree that if one retires five years later, their pension should be significantly higher than if they retired on schedule. For instance, in the United States, if one retires five years later than the normal pension collection age, the pension can increase by 30%. What is the situation like in our country for those who retire later?

The pension calculation formula in our country.

At present, the pension calculation formula in our country mainly consists of two parts: the basic pension and the personal account pension.

① The basic pension is calculated as the retirement year's average social wage × (1 + the individual's average contribution index) ÷ 2 × the number of contribution years × 1%.

The average social wage of the year prior to retirement is, in essence, a system designed to ensure the purchasing power of the pension. As the economic development level of our country continues to improve, the rate of wage increase will gradually slow down. Therefore, we assume that the average social wage remains constant.

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The average contribution index generally ranges from 0.6 to 3. If one contributes according to the average social wage, the average contribution index would typically be around 1.0. Since we are estimating the situation for an average person, we will calculate the average contribution index as 1.

According to the basic pension calculation formula, after contributing for 15 years, one can receive 15% of the average social wage as a basic pension. After contributing for 30 years, one can receive 30%.

With an average contribution index of one, for each additional year of contribution, the pension will increase by 1% of the average social wage.

If the average social wage remains unchanged, and if one does not continue to pay social security after retiring five years later, the basic pension will remain the same.However, paying social security is a duty mandated by labor law for both employees and employers. If one pays for an additional 5 years, they can receive an additional 5% of the average social wage. This means that if the original payment period was 15 years, the basic pension would increase by 33%. However, if the original payment period was 30 years, the basic pension would only increase by 16.7%. If the original payment period was 40 years, it would only increase by 12.5%.

Let's also discuss the pension system in the United States. The U.S. only calculates 35 years of contribution periods. If the contribution exceeds 35 years, only the 35 years with the higher contribution index will be considered. Therefore, paying for more years is useless. However, the U.S. pension insurance payment is a social security tax, and the tax collection mechanism is very strict. The penalties for tax evasion are very severe, and there are very few cases of tax evasion.

② The personal account pension part is equal to the balance of the pension insurance personal account divided by the number of months determined by the retirement age.

This part is the most affected by the delay in retirement.

If one retires 5 years later, the balance of the pension insurance personal account will include 5 more years of interest. In recent years, the interest rate for the pension insurance personal account has been very high, even reaching 3.97% last year. Assuming it drops to 3% in the future, waiting for 5 more years could increase the personal account balance by 15%.

Additionally, during the 5 years of delayed retirement, pension insurance will continue to be paid. Assuming the payment amount remains unchanged, it could increase the personal account balance by 12.5% to 33%.

The number of months for personal account distribution is an important attribute for getting more by retiring later. If we retire at 50, the distribution months are 195, at 55 it's 170, at 60 it's 139, and at 65 it's 101.

If retirement is postponed from 50 to 55, under the same personal account balance, the personal account pension would increase by 14.7%. If it is postponed from 55 to 60, it would increase by 22.3%. If it is postponed from 60 to 65, it would increase by 37.6%.If the increases from the two methods mentioned above are added together, delaying retirement by 5 years could potentially increase an individual's personal account pension by up to 106%, or at least by about 50%.

Conclusion.

Considering the proportion of basic pension and personal account pension, delaying retirement by 5 years and paying an additional 5 years of pension insurance, according to the current pension calculation formula, the pension could be increased by at least 27% to 63%.

Overall, postponing retirement has a positive significance for the pension. Under voluntary and flexible guidance, it is believed that many people will choose to do so. #Top Headline Creation Challenge# #Pension#