Partial early old-age pension
You can draw part of your old-age pension already before reaching your lower old-age pension age. At the same time, you can work as much as you like or stop working altogether. Choose the option that best suits you within this flexible pension type and retire partially, if you wish. The partial early old-age pension is also referred to as the partial old-age pension.
When can I retire on partial old-age pension?
You can retire on partial old-age pension when
- you are 61 years or over and
- you do not receive any other earnings-related pension of your own
you do not have disability pension which is dormant because you are working
If you were born in 1964, you can retire on partial old-age pension at the age of 62. The pension age for those born 1965 and after has not been confirmed yet.
Partial old-age pension may be a good solution for you whether you are an employee, self-employed or unemployed
While on a partial old-age pension, you can work as much as you like without earnings limits. You accrue pension on your work. If you wish to change the size of your work input, you must agree on it with your employer. You can retire on partial old-age pension also when you are unemployed or self-employed. If you are self-employed, make sure that your YEL income corresponds to the value of your work input also during the partial old-age pension.
Impact on the tax rate
The partial old-age pension is taxed as pension income. If your income from work reduces when you retire on a partial old-age pension, usually your tax rate will also be reduced. But if your previous income level remains the same and you take a partial old-age pension, the tax rate will increase. You can use the tax percentage calculator at vero.fi to check how the change in pension income and salary income affects the tax rate.
Part-time work and partial old-age pension
If you wish to reduce your working hours, ask your employer if this would be possible. The partial old-age pension will be an additional source of income for you if you get paid less.
Full-time work and partial old-age pension
You can work full time and draw partial old-age pension in addition to your pay. However, take into account the pension’s impact on your taxation.
Unemployment and partial old-age pension
Partial old-age pension can be a welcome addition to complement your unemployment allowance. You can draw partial old-age pension and receive unemployment allowance simultaneously. Please remember that the partial old-age pension may have an impact on the labour market subsidy paid by Kela.
Amount of partial old-age pension
You decide how large a pension you wish to withdraw. There are two options: 50 per cent or 25 per cent. This 50 or 25 per cent is calculated from the pension that you have accrued by the end of the year preceding your retirement.
If you start by withdrawing 25 per cent of your pension, you can raise it to 50 per cent later. However, you cannot start by withdrawing 50 per cent of your pension and then reduce it to 25 per cent.
If you retire on partial old-age pension before you reach your lower old-age pension age, the reduction for early retirement will reduce your partial old-age pension by 0.4% per month for every month preceding the lower old-age pension age. If you retire on partial old-age pension after reaching your lower old-age pension age and you have not received unemployment allowance for that period, your partial old-age pension will be increased by the increase for deferred retirement.
An increase for deferred retirement will be calculated on your partial old-age pension if you apply for the partial old-age pension after the lower retirement age and you do not receive an unemployment benefit for that period. The increase for deferred retirement is 0.4 per cent for each deferred month.
If you retire on partial old-age pension before you have reached your lower retirement age, the reduction for early retirement will reduce your future pension payments by 0.4% for each month preceding your lower old-age retirement age. The reduction for early retirement is permanent.
The partial old-age pension might reduce your future pension
Retiring on a partial old-age pension might reduce your future pension permanently. If you retire on partial old-age pension before you have reached your lower retirement age, the reduction will be the same as the reduction for early retirement applied to the partial old-age pension. If you retire on partial old-age pension after your lower retirement age, the reduction will not be done.
In practice, the older you are when retiring on partial old-age pension and the more your work while on the partial old-age pension, the less your pension will be reduced.
If you are considering retiring on a partial old-age pension, try our MyPension service’s calculator. You can also use the calculator to estimate the amount of your future full old-age pension. It also allows you to calculate how much the partial old-age pension will reduce your future full old-age pension.
Please note that old-age pension does not start automatically after partial old-age pension. It must be applied for separately.
Example: Partial early old-age pension
- Year of birth 1960
- Lower old-age pension age 64 years 6 months
- Partial old-age pension 50 per cent, at the age of 61 years 6 months in 2021, which means 36 months early
- Pension accrued by the end of 2020 EUR 2,000 per month
Reduction for early retirement for 36 months x 0.4 per cent = 14.4 per cent
50 per cent x EUR 2,000 per month x (1 - 0.144) = EUR 856 per month.
Finally, the pension amount will be reduced by the impact of the life expectancy coefficient.
Cancellation of partial old-age pension
If you have second thoughts, you can cancel your pension even after having received a pension decision from us. In that case, cancel your pension in writing within three months of the decision. You can do this using the MyPension service’s 'Lähetä viesti' (Send a message) feature or by contacting our customer service. If you cancel your pension, you will have to pay back the pension that has already been paid to you.