Retirement

Your future pension is a financial goal

When we talk about future pensions, we usually think about salary, years of insurance and retirement age. But they are also affected by another factor that changes slowly and almost imperceptibly — demographics.

Officially, the first pillar is defined as a solidarity-based pension system with a pay-as-you-go financing principle, closely connected with economic activity and the population’s income.

The system can therefore be presented in simplified terms as follows:

workers and employers pay contributions
contributions enter the social insurance system
current pension payments are financed from the system

An ageing population and a shrinking working-age population create significant financial pressure on the pension system, which changes as follows:

the number of people of retirement age changes: there are more people of retirement age;
the number of potential workers changes: the working-age group of 20–64 shrinks;
the potential number of contribution payers changes: the number of people and their employment;
the volume of contributions changes: the number of people working and the amount of their wages and income;
the relationship between the system’s resources and the number of pensioners changes: if there are more pensioners and fewer potential payers, the financial burden increases;
the state adjusts the pension system: raising the retirement age, changing contribution rates and other decisions;
the conditions for receiving a future pension change.

To enable people of working age to build a high pension with purchasing power, there are second and third pillars — additional instruments created by the state.

The amount of your desired pension in 20–45 years is a mandatory financial goal for everyone.

When planning their financial future, everyone should calculate how much money will be needed each month during 20 years of retirement — this is the amount of money that must be prepared during the active phase of life.

How much of this amount will come from the first pillar.

For example, based on average figures for 2025, the average wage is €1,620 gross per month, and the average pension is €684.10 per month.

€1,620 − €684.10 =€935.90 per month — the difference that must be built up in order to maintain one’s standard of living.

That is precisely why it is worth choosing an effective combination of financial instruments that takes into account the personal circumstances of each person’s life situation.

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