Research has shown that working 5 years longer after your 60, can increase your pension with 80%. The study is done because so many people want to stop early with working. And the age that people quit their job is an important key factor for the standards of their pension. To calculate how much you want to have when you are retired, they use “replacements ratios”. It gives the relationship between their earnings and what they want to receive in their pension.
There are tables made and they show the differences when you work 5 years longer. Also something you must be aware off is the fact that extras that you got from the company, like cars etc are not calculated in those ratios. There are a couple of strong reasons why you should work 5 years longer after your 60:
- Higher earnings
- A cheaper pension
- Extra contributions
- Compound interest
But these are not the only ones, your insurance will have to pay you more when you are retired and women have even more advantages of it, because they live most of the time longer. Also can you invest 5 years longer in other investment products.
I know that longer working isn’t such an attractive idea, but maybe we must consider it, certainly with now, when we must face the social problem of people who keep growing older. The more and more people retire but the less go working, and to solve this problem, we must work longer. So don’t look only on the negative side of the story, but do also think at the advantages you can take from it.
Els
source: http://www.persfin.co.za/index.php?fArticleId=4112108
There are tables made and they show the differences when you work 5 years longer. Also something you must be aware off is the fact that extras that you got from the company, like cars etc are not calculated in those ratios. There are a couple of strong reasons why you should work 5 years longer after your 60:
- Higher earnings
- A cheaper pension
- Extra contributions
- Compound interest
But these are not the only ones, your insurance will have to pay you more when you are retired and women have even more advantages of it, because they live most of the time longer. Also can you invest 5 years longer in other investment products.
I know that longer working isn’t such an attractive idea, but maybe we must consider it, certainly with now, when we must face the social problem of people who keep growing older. The more and more people retire but the less go working, and to solve this problem, we must work longer. So don’t look only on the negative side of the story, but do also think at the advantages you can take from it.
Els
source: http://www.persfin.co.za/index.php?fArticleId=4112108
3 opmerkingen:
I didn't know that 5 years would make such a difference, so I really find this article interesting. People are getting older, and the statistics show that the average age expectations for the youngsters nowadays will be around the 100. In my opinion, the benefits of working a little bit longer beat the disadvantages.
Laura
I think it is a very good article, because it tells us wat not everybody knows. Working longer could be a good solution for the many old people. But I don't think everyone will work longer, even because of the benefits.
I can imagine I would like to stop working at a certain age, specialy when you have physical hard work
Kathleen
I think it's rather normal that you earn more advantages when you work longer. You have more 'space to breathe' then people who are already 5 years on retirement. You have to wonder how many people want to work 5 years after a career of 40 years.
Jan
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