The amount of the pension depends on the length of service, the social security contributions paid and parameters set by the state. Knowing how your pension is calculated is important for planning your future finances and deciding how much extra to save.
Pension structure
The state old-age pension consists of two parts:
- Total share: fixed, depending on the basic amount set by the State and the same for all
- Individual share: depends on the number of accumulated Sodros points, length of service and contributions paid
What does the individual part of my pension depend on?
Length of service and contributions paid
The more years of service and the higher the contributions paid, the more points are accumulated and the higher the individual part of the pension. This part also includes supplements for longer service or additional social guarantees, if provided by the state.
Practical advice on saving for retirement:
When saving for the long term, even a higher average salary over a career can significantly increase the size of your pension, so it’s a good idea to keep track of your points and regularly check your pension funds’ statements.
Conclusion:
The calculation of a pension includes both a general and an individual part, so it is important to keep track of accumulated points and years of service in addition to saving when planning for the future. This allows more effective planning for financial well-being in old age.
Accounting services in Kaunas and throughout Lithuania, as well as other related questions or answers by phone – +37061228888. Our team is ready to help.
