In recent years, the contributions for the basic pension insurance for employees have been increasing, leading some farmer friends to pay attention to the rural pension insurance. The contributions for rural pension insurance are relatively low, making it more suitable for people with medium and low incomes. However, how many years does it take to break even with this type of pension insurance?

Payment for Urban and Rural Resident Pension Insurance.

Rural pension insurance, also known as urban and rural resident pension insurance, has now unified the treatment for both urban and rural residents. Regardless of whether one is a farmer or an urban resident, everyone pays the same contributions and enjoys the same benefits.

The payment levels for urban and rural resident pension insurance are determined by the state. Generally, they range from 100 yuan to 2000 yuan, and different regions can set their own payment levels based on local economic and social development. For example, Shandong Province currently offers levels from 100 yuan to 8000 yuan. Qingdao City has even established two levels of 10,000 yuan and 12,000 yuan. The 100 yuan payment level is specifically set by the state for people on minimum living allowances; individuals do not actually have to pay for this, as it is covered by the government.

Advertisement

There is a centralized payment period for urban and rural resident pension insurance, which is usually in the fourth quarter of each year. Of course, to accommodate people who work outside and return home to make payments, some places often extend the centralized payment period to after the Spring Festival of the following year.

As long as the insured person pays during the centralized payment period, the government will provide an additional subsidy, which will be added to the individual account to increase the pension benefits. For example, in Henan Province, a 200 yuan payment level is subsidized by the government with an additional 30 yuan; in Shanghai, a 500 yuan payment level is subsidized with 200 yuan; and in the Ningxia Hui Autonomous Region and Shandong Province, a 100 yuan payment level is subsidized with 30 yuan. The higher the payment level, the more the government subsidy.

According to the regulations for the benefits of urban and rural resident pension insurance, as long as one has paid for 15 years, they can receive the basic pension and personal account pension at the age of 60.

The basic pension is a benefit fully subsidized by the government's finances. Starting from July 2023, the minimum standard for the basic pension of urban and rural resident pension insurance in China is 103 yuan per month, and it will be increased by another 20 yuan in 2024. However, the state also encourages localities to improve the basic pension benefits based on their local economic and social development levels and fiscal capacity. Shanghai has already reached a level of 1490 yuan per month.The basic pension component provides additional pension increases for those who have paid contributions for more than 15 years and for retirees at an advanced age.

The personal account pension part is uniformly calculated by dividing the balance of the personal account at the age of 60 by 139 months. For example, if the personal account balance is 5,000 yuan, the monthly personal account pension would be approximately 36 yuan.

According to the Social Insurance Law, in the event of the insured's death, the balance of the personal account of the pension insurance can be inherited. This provision is the same as the basic pension insurance for employees, but both the personal contributions and the state subsidies for the urban and rural resident pension insurance go into the personal account, so there is no possibility of loss, and there is potential for profit. Eligible individuals may even enjoy collective subsidies. For instance, if an individual pays 1,000 yuan, receives a collective subsidy of 2,000 yuan, and a government subsidy of 300 yuan, and passes away after just one year of payment, the individual can inherit the 3,300 yuan.

Additionally, various provinces have established a funeral subsidy system for participants in the urban and rural resident pension insurance. The standards vary, with Shanghai offering the highest at 6,000 yuan, Beijing at 5,000 yuan, and Guangzhou at 3,300 yuan, although most areas are around 800 to 1,000 yuan.

In fact, if we pay at the 100 yuan tier, the return on investment ratio is the highest. After all, paying for 15 years only amounts to a total of 1,500 yuan, and the pension benefits received in one year will exceed the relevant contributions. However, taking 1,000 yuan as an example, after paying for 15 years, the total outlay is 15,000 yuan.

Assuming a personal account balance of 20,000 yuan, the monthly personal account pension would be 144 yuan. Assuming the basic pension is 200 yuan per month, the total pension benefits would be 344 yuan.

Based on the average life expectancy of 77.93 years in 2020, the total expected return is 74,000 yuan, which is about 4.9 times the investment, making it still very cost-effective. #What level should farmers choose for pension insurance?# #Top Headline Challenge#