Pension
First of all, it is worth saying that in the Republic of Estonia, you can retire from the age of 65. At the same time, the age is the same for both men and women - there is equality here. When a citizen reaches retirement age, he can continue to work and earn additional income, or you can do it differently: say goodbye to colleagues and devote more time to hobbies and family.
Unfortunately, the population is aging, the number of working citizens is decreasing, and the number of dependents is growing. The question is how to make sure that people who have worked for a long time for the good of the country receive the necessary funds, thanks to which it is possible to ensure a decent old age. Raising taxes indefinitely will not work, otherwise the number of citizens able to pay taxes will greatly decrease.
Instead, Estonia developed a three-tier funded pension system. Some part of the income upon reaching the required age is provided by the state. Otherwise, the amount of cash receipts each month depends on each individual citizen.
- The first pillar of pension provision - as already mentioned, the part that is provided by the Republic of Estonia. But this guarantee should be earned by working in Estonia for at least 15 years. Naturally, officially.
- The meaning of the second pillar is to deduct 2% from the official salary every month. This is done by the employer. Estonia adds another 4% social tax to these funds.
- The third step is the same as the second, but it is on a voluntary basis. You can join this level if, after all the calculations, the final amount does not suit you. The amount of contributions is determined directly by the citizen himself.
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