The current pension system is based on generational replacement. Everyone who is employed under an employment contract has paid social security contributions. Contributions are compulsory and are paid by the employer for us, and their amount depends on our earnings. The more we earn, the higher premiums we pay. And every sum is credited to our ZUS pension account.
Theoretically, the same applies to self-employed workers. Each of the entrepreneurs is obliged to pay even the lowest permissible contribution and few people decide on higher amounts. The minimum contribution, however, means that his pension in the future will also be minimal. This is how it looks in theory. In practice, however … nobody will take care of your pension if you don’t take care of it yourself. What can you do to ensure a secure future? How to postpone yourself for retirement?
Some tips on how to save money for retirement
How to postpone yourself for retirement? The most important thing is to start saving wisely and with your head. Wise financial management does not mean that you have to give up all pleasures and deny yourself everything! To begin with, analyze your situation, all revenues, expenses, check how much savings you have and find out your real financial possibilities.
Then set a goal, spending limits and plan the budget for the month. As soon as you do this, immediately transfer money to your savings account at the beginning of the month and develop a habit of saving regularly, even small amounts, but not at all costs! Do not impose restrictions on everything, because you will quickly become discouraged.
Save even small amounts, but do it regularly!
Start to postpone even small amounts, e.g. USD 200, and increase them gradually. How much should you postpone monthly to finally receive an additional USD 1,000 to your pension? 30-year-olds should set aside about USD 330 a month, 35-year-olds USD 420, and 40-year-olds already USD 530. In this way, for 20 years of retirement you will save an extra thousand zlotys!
Invest, but be careful!
The basic rule – don’t invest in something you don’t understand! If you can’t assess the risk and don’t know what the profit depends on, then let it go. Not everyone is the type of entrepreneur. Placing savings in investment funds and investing in shares of listed companies is quite a risky move. In this way, people with many years of work ahead of them can invest.
If you are a short time away from retirement, then individual savings accounts and deposits are a safer way to save for retirement. In this way you do not risk losing capital and although the money is low interest, the effect of compound interest, i.e. accruing interest on interest, works, which will give you quite a good profit after many years of saving.
Use while you are young!
The risk appetite and uncertain investments should decrease with increasing age. If you are young, you can afford more madness. A young, ambitious, hard-working, entrepreneurial and successful man can quickly conquer the labor market and achieve above-average earnings. It also has a chance to achieve success in sport or build a company that will start to prosper and bring profits.
Build valuable assets
If you have entrepreneurship, start building high value assets. These may be shares in a company that you can cash in or earn from sitting on the supervisory board. Real estate investments that can generate regular income, e.g. from renting, can be popular and safe.
Work as long as possible and pay the lowest taxes possible
Did you know that work effectively protects against dementia? Retirement aged 60-65 does not serve your health or your mind! Therefore, work as long as possible! Not necessarily full-time, but e.g. part-time, mandate or specific work. Also, if you can take advantage of tax breaks and pay lower taxes, then make use of this right! The government, throughout your life, took a large part of your money, so feel free!
Start a family and invest in yourself and your loved ones!
Start a family. Maybe you don’t think about it today, but the family you create will be your greatest support and support in old age. Remember that money is not everything, and relationships with your loved ones are a hundred times more important than money. They will help you the most in crisis situations.
In the case of retirement, don’t just rely on your savings or count on the state. Invest in yourself and loved ones! Take care of your own health, because thanks to this, you will maintain full mental fitness, independence and professional activity for a long time. Educate and develop, this will pay off in a better position on the labor market, even at an older age and with higher incomes than your peers. If you run your own business today, invest in it! Maybe thanks to her, you will soon become completely financially independent and retirement will no longer keep you awake at night?
Why should you postpone retirement?
The pension system that is currently operating is inefficient and will soon become completely insolvent. If you are not yet 40 years old, your ZUS retirement benefits will be so low that you will not survive the whole month. Money is not enough for even basic needs! Unfortunately, this is how the future is created. If you do not want to starve, you can do nothing but save yourself for retirement!
As a pensioner, you will receive about 30% of your current income! Will you have financial and psychological comfort when you retire? These contributions, which you pay to the Social Security Institution every month, are not really contributions, but another tax. And they are not put off for your future retirement, they only finance the retirement benefits of current seniors. You will not get a broken penny from your contributions to OFE, because these funds have already been confiscated and transferred to ZUS! Under the system, your future retirement will be funded by contributions that will be paid by the younger generation, but …
Here is the problem. Fewer and fewer people work in the private sector, so fewer and fewer people pay contributions to ZUS! In this way, sooner or later ZUS will go bankrupt and become completely insolvent. Currently, the government is still doing what it can. It introduces new taxes and increases the existing ones. He constantly raises earnings by minimum amounts, thus increasing social security contributions …
The only question is – How long can you resuscitate and artificially sustain something that ends your life ?! Do not count on ZUS. He will not provide you with decent old age. You can provide it for yourself by postponing it. And time is now your greatest ally …