Retirement almost halves your income on paper – it’s worth keeping this in mind and taking steps

There is a visible difference between average pensions and net average wages. Therefore, it is worth thinking about our own future as soon as possible and taking the first steps towards self-care – according to the K&H compilation.

Minus 232 thousand forints

According to official data, in the first nine months of this year, the average net monthly earnings of full-time workers amounted to 476 thousand forints. In the same period, according to KSH data, old-age pensions amounted to an average of 244 thousand forints per month.

In other words, the current average pension corresponds to 51.3 percent of the current net earnings. This means that an average-earning employee can manage with about 232 thousand forints less per month when retiring than during their active years. According to K&H, it is therefore particularly important for those who can, to plan their future financial security in advance during their active years.

The sooner the better

Long-term savings forms – including state-subsidized pension insurance available with tax refunds – provide additional income in old age that helps create financial security. The tax credit available after annual payments can further increase the value of savings. Regular savings allow for the continuous building of retirement assets over the long term, which can contribute to a more stable standard of living in old age.

Székely Pálma, Head of Sales and Life Insurance at K&H, said: “Anyone who wants to mitigate the loss of income associated with retirement should start saving early. Long-term solutions, such as pension insurance, can contribute to financial security in retirement in a predictable way.” He emphasized that conscious financial preparation plays an increasingly important role in terms of future financial stability, since, based on current data, the state pension alone is often not sufficient to maintain the previous standard of living.

How to make an approximate calculation?

The K&H pension calculator can provide a good guide to the development of savings, which provides an estimate of the approximate monthly pension that those concerned can expect based on age and current average salary. On the site, visitors can calculate their expected state pension according to the currently known rules, as well as how much they should set aside on a monthly basis in order to maintain their current standard of living after retirement. It is important, however, that the pension calculator only shows an approximate amount. The specific monthly benefit amount due to future pensioners is only revealed after reaching retirement age, and it can be influenced by numerous unpredictable factors, such as changes in the income of the person concerned, the interest rate environment, inflation, the development of the labor market, and the changing legal environment.