eläkepotti

Eläkepotti is a Finnish term that translates to "pension pot." It refers to the accumulated sum of money that an individual has earned and saved towards their retirement. In Finland, the pension system is a combination of earnings-related pensions and basic pensions. The eläkepotti specifically relates to the earnings-related component, which is built up over an individual's working life through contributions made by both the employee and the employer.

The size of an individual's eläkepotti is determined by their earnings during their career and the pension accrual rate. Different accrual rates apply depending on age. For instance, younger individuals may accrue a lower percentage of their salary towards their pension than older individuals. This system aims to ensure that pensions are proportional to an individual's lifetime earnings.

When a person retires, their eläkepotti is used to calculate their pension payments. The accumulated amount is divided by a life expectancy factor, which varies based on the year of birth. This calculation provides an estimate of the annual pension amount. The pension system is managed by various pension providers, such as Ilmarinen, Varma, and Elo, which invest the accumulated funds to ensure the sustainability of the pension system. Eläkepotti is a key concept for understanding how retirement income is determined in Finland.