FINLAND - About 40,000 Finns could retire on an old-age pension in 2005, according to the Finnish Centre for Pensions.
This year marked the introduction of the “flexible retirement age”, part of wide reaching pension reform.
As a result, workers can choose to cash in their old-age pension between the ages of 63 and 68, clearing the way for many more people to retire this year than in previous years, the centre said. For about every fourth, retirement is possible also on the basis of the 2004 legislation.
It is estimated that about 25,000 people will be eligible to take the old-age pension from the beginning of February but the centre said new benefits enticing people to work longer make it “difficult to estimate exactly how many will retire and how many will continue working – maybe even beyond their former retirement age”.
As part of the incentives for older workers, those who continue to work into old age will benefit from a higher pension accrual rate.
Until the age of 53, a pension accrues at the rate of 1.5% annually. Between 53 and 62, that rate increases to 1.9% and between 63 and 68, the accrual rate is 4.5% annually.
The centre said taking the old-age pension early should be considered carefully. Under the reforms, the lower age limit for the old-age pension was increased from 60 to 62 and if a person retires at 62, their pension is reduced by 0.6% a month until the age of 63.
Likewise, if a person takes the early old-age pension at the age of 60, the pension is reduced substantially and permanently.
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