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Your pension could increase a lot if you make this choice but let's look at the pros and cons

Your pension could increase a lot if you make this choice but let's look at the pros and cons

There is a fairly simple way to significantly increase your pension. Let's see what it consists of and possible disadvantages.

Increasing your pension is not impossible: there is a simple way to do it. But there are also disadvantages. Let us analyze the situation in detail.

There is a simple way to increase your pension

Having a slightly higher pension is the desire of many. Italy's pensions are among the lowest in Europe but with one of the highest taxes. Given the increases over the past two years, getting to the end of the month with an average pension is no easy feat. Most people work their whole lives only to find themselves with a Social Security check that is woefully insufficient to cover all of their expenses.

Not only. Current pensions are mostly calculated using a contributory system This certainly does not benefit workers, and above all, it does not benefit workers who receive low wages. In fact, the contributions system, as the name itself suggests, takes into account the contributions paid: a low salary means few contributions, and few contributions lead to a poor pension. however There is a very simple way to increase the amount of your Social Security check.

Here's how you can boost your pension

Is your pension not enough to meet the rising costs of living? There is an easy way to increase the amount. Simple but not without flaws. Let's see what it's about.

How to increase your pension
Here's how to increase your Social Security allowance

As expected, most pensions are now calculated using a contributory system. To calculate the amount of a Social Security check a person will receive, this system multiplies the contribution amount — that is, the set of contributions paid during a career — by a conversion factor. The latter increases with the age at which a person retires.

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Thus, delaying leaving a job for a few years means not only getting more contributions, but also getting a more useful conversion factor. So If you retire after a few years, you will receive a higher monthly allowance. Of course it has to be worth it. Staying at work for a few more years also means giving up spending more time with your loved ones, and having less time for yourself and your hobbies.

So we must make a calculation to understand whether continuing to work is really appropriate or not. Let's take an example. Consider a 67-year-old man who finds himself with a contribution of €300,000. The transformation coefficient corresponding to 67 years is 5.72%. When he retires at the age of 67, he will receive a total monthly allowance of €1,320. but If he decides to work until he is 68 years old At this point, the conversion factor will be equal to 5.93% and his monthly pension will be a total of €1,414: approximately €100 in total each month.