How Much Retirement Income Will I Need?

Retirement refers to the withdrawal of a worker from work due to his or her complete disability (or partial disability) due to old age or disability due to work or illness in accordance with relevant state regulations. Since January 2011, China has levied a personal income tax on one-time subsidy income obtained by individuals for early retirement in accordance with the "wage and salary income" item. Relevant government departments have continuously released the policy intention of extended retirement. Opinion surveys show that more than half of the respondents are opposed to extending the retirement age, and most of them advocate retirement at the prescribed age.

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China has begun to enter an aging society. With the increase of physical health, learning, and change of ideas, more and more retirees have entered the job market, and through re-employment, they can start a business, engage in voluntary activities, volunteer activities, or re-employment. A richer retirement life will become the norm and will have a significant impact on the functioning of society.

[I] "Notice on Several Issues Concerning the Implementation of the Labor Contract System" Ministry of Labor [1996] No. 354 ^[2]

At the "Development of Platform Economy and Promotion of Regional Cooperation" summit forum held in Shanghai on September 25, Dai Xianglong, chairman of the National Social Security Council, said that the calculation of China's pension gap needs to be studied by the relevant departments of the State Council. ? He believes that "it is not passively preparing money, but adjusting this system." In addition, improving the pension system may involve measures such as extending the retirement age and the age of pension payments, and may retire at the age of 63 in the future.

On the 25th, Dai Xianglong, chairman of the National Council for Social Security Fund, acknowledged at the "Development of Platform Economy and Promotion of Regional Cooperation" summit that there is indeed a gap in China's pension, and suggested that the pension system should be improved to achieve a balanced income.

What are the requirements for enterprise employees to receive the basic pension every month after retirement?

According to the State Council's Decision on Establishing a Unified Basic Endowment Insurance System for Enterprise Employees (Guo Fa [1997] No. 26), enterprise employees participating in basic endowment insurance meet the retirement conditions and have completed retirement procedures.

In France, things are different. France is recognized in the world as a country that is more generous in implementing social welfare. General employees can receive 50% of their original salary after retirement, while civil servants can calculate 75% of their salary before retirement. French law requires that you must pay pension insurance for at least 160 quarters and apply for retirement after reaching the age of 65 in order to fully enjoy the pension. In France, the base for calculating the original wage income of general retirees is composed of the best 25-year average of the parties' income. For example, a person's monthly income in the best period of his life is 4,000 euros (about 40,000 yuan), the monthly income in the worst period is only 1,000 euros, and the average monthly income of the best 25 years is 2500 euros, then he can The pension received is 1,250 euros. For those who have reached the age of 65 but have not paid their pensions in full, the pension is deducted in proportion. For example, suppose a person who has reached the age of 65 but only paid 90 quarters of pensions, and the average monthly income in 25 years is 2000 euros, and he can only receive a retirement pension of 562.5 euros (90 ÷ 160 × 2000 euros × 50%) . It seems that the length of pension payment has a great impact on pension income.

The legal retirement age in most developed countries is 65, and the United States and Germany will raise the retirement age to 67 in the next few years. These countries encourage people to stay in their jobs when they reach the legal retirement age. The British mantra is "started at 50 years old." The advertisement of a company established on the street of Cologne, Germany, has already shown the change in the concept of elderly people in Western countries: "55 years old is too old? We even hire 65-year-olds."

In Finland, retirement benefits at the age of 65 can be up to 40% higher than retirement at the age of 60. Americans who have reached retirement age but are still willing to continue to work will be rewarded with more than 10 percentage points for each additional year of work until they formally retire. In fact, the United States has adjusted its retirement age several times in recent years. The retirement age is set at 65 years and 6 months, and it will be extended for two months each year until it reaches 67 years. Not long ago, U.S. Senator Hager has introduced a bill to raise the retirement age to 68.

This is indeed the case. On the one hand, the governments of western countries are already horrified by the huge gap in pensions and the arrival of elderly society; on the other hand, company policymakers are currently re-examining the value of retirees and are keen on the elderly "Waste heat" development. according to

According to the latest post-retirement pension calculation, the pension at the time of employee retirement consists of two parts: pension = basic pension + personal account pension Among them, personal account pension = personal account storage amount ÷ calculated months (count The number of months is determined according to the retirement age and the average life expectancy of the population at that time. The calculated number of months is slightly equal to (average life expectancy of the population-retirement age) X12. It is 195 at 50, 170 at 55, and 139 at 60. 120) Basic pension = (average monthly salary of employees in the province in the previous year + average monthly salary of the indexed person) ÷ 2 × payment period × 1% = average monthly salary of employees in the province in the previous year (1 + average payment by myself) Index) ÷ 2 × payment period × 1%
In the formula: I indexed monthly average wages = monthly average wages of on-the-job employees in the province in the previous year × my average monthly payment index. It can be seen in the above formula that when the payment period is the same, the level of the basic pension depends on the individual's average contribution index. The individual's average contribution index is the historical average of the ratio of the actual contribution base to the average social wage. . The lower limit is 0.6 and the upper limit is 3. Therefore, in the two calculations of pensions, no matter what the situation, the higher the contribution base and the longer the payment period, the higher the pension.
The collection of pensions is indefinite. As long as the recipients survive, they can enjoy the benefits of receiving monthly pensions. Even if the personal account pensions have been used up, the basic pension will continue to be calculated according to the original standard. Moreover, individuals Pensions also increase year by year based on the increase in the average monthly wages of socially employed workers. Therefore, the longer you live, the more you can get, which is definitely more cost-effective than paying the fee.

Retired China

Relevant government departments have continuously released the policy intention of "extending the retirement age", which has caused continuous heated debate in society. In this regard, the Guangzhou Social Opinion Research Center conducted public opinion surveys across the country (excluding Hong Kong, Macao and Taiwan). The results announced on June 4, 2013 showed that more than half of the respondents opposed the extension of the retirement age, and most advocated retirement at the prescribed age.

Regarding the extension of retirement age, 54% of the respondents objected, while 26% expressed support. Most of the residents interviewed advocated "retirement at the required age", reaching 60%; while those who advocated "early retirement" were 17%; those who advocated "retirement in later years" were only 10%.

The survey shows that the majority of those who advocate "early retirement" want to "enjoy life early", with a rate of 45%; followed by "hard work", at 37%; and again, "make way for young people", 34%. Those who advocate "retiring a few years later" mainly have "health status allowed" and "boring retirement life".

The analysis found that the employed people employed by the unit, enterprise or others are most opposed to extending the retirement age, the proportion is as high as 64%, the highest among all groups. At the same time, the proportion of young people aged "31-40" and middle-aged people "41-50" who want to "retire early" is 23%. The former is mainly to "enjoy life early", while the latter is due to "hard work".

According to the latest poll by Gallup, an authoritative polling agency in the United States, the older people in the United States, the more they want to retire a few years later, and the proportion of young and middle-aged people is 38%. On the contrary, in China, many people in this age group want to retire early, and only 10% want to retire a few years later. ^[9]

On December 2, 2015, the Institute of Population and Labor Economics of the Chinese Academy of Social Sciences and the Social Science Literature Publishing House released the "Green Paper on Population and Labor: Report on Population and Labor Issues in China No. 16" in Beijing. "Merge track, postponed retirement" reform path.

The plan pointed out that the pension system should first be merged, and the retirement age should be classified into two categories: the age for receiving pensions for employees and the age for receiving pensions for residents. Second, the retirement age reform plan for employee pension insurance goes in two steps. The first step: When the integration of the pension system was completed in 2017, the distinction between the status of female cadres and female workers was eliminated, and the retirement age of women in the employee pension insurance was uniformly set to 55 years. Step 2: Beginning in 2018, the retirement age of women will be delayed by 1 year every 3 years, and the retirement age of men will be delayed by 1 year every 6 years until they reach 65 at the same time in 2045. Thirdly, the retirement age of residents' pension insurance will be delayed by 1 year every 3 years starting in 2033 and finally being completed in 2045. ^[10]

On August 29, 2018, Russian President Vladimir Putin announced that the retirement age of women will be raised from 55 to 60 years instead of the 63 previously decided; however, the retirement age of men will be increased from 60 to 65, in line with the original plan. ^[11]