- Hans Weber
- February 1, 2023
Czechs want to retire earlier than 60 but may not be able to afford it
Almost every second Czech would like to enjoy retirement from the time of their 60th birthday at the latest. However, a fifth of people do not think about retirement, do not think about how they will spend it, do not prepare financially for it, and rely on the state. Most often, they would like to save a million crowns for their old age, but this will not be enough.
Presently, men retire at around 63 to 64 years of age, women a few years earlier, and the number of children they have also raised matters. For those born in 1972 and later, the uniform retirement age will be 65 under the current rules.
However, a recent survey by Instant Research for the Porto platform showed that Czechs already see themselves retiring much earlier. One in eight at fifty-five and just under a third at sixty at the latest. Most of those surveyed—more than a third—want to retire at 65, and less than a fifth at 70 or later.
And what plans do people have for their old age?
The most frequently mentioned answer was: I will work as long as possible. It was noted by one in four respondents. A fifth of people sees themselves in the garden with a book in their hand and a dog by their side.
A tenth of people plan to buy a house by the sea in their old age, and this idea is mainly held by young people under 24, who may one day be able to make it happen. 11 percent of people want to have grandchildren, more often women. Around eight percent of people want to travel in retirement.
You need to save to meet your plans
Fortunately, many Czechs behave responsibly and prepare when they are no longer working. In a survey carried out by the Portu platform a few months ago, it turned out that half of the people have experience with investing, while almost three-fifths of them support regularly.
A third can save up to a thousand crowns, a quarter can save between one and three thousand crowns, and less than a fifth can hold between three and five thousand crowns. Every eighth respondent can keep between five and ten thousand crowns, and roughly every tenth respondent can set aside more than ten thousand crowns per month.
A million will not be enough
However, Czechs have somewhat distorted ideas about how much they need to put aside for their pensions in order not to suffer poverty from want. Almost half (46 percent) plan to set aside up to one million crowns for retirement. However, according to analyst Louženský, this amount will not be enough. He calculated an average pension in 2021 (CZK 15,411) and an average wage of CZK 37,839.
So, if you were to retire now, you would need CZK 22,428 per month to make up the average wage and maintain your standard of living. The average life expectancy in the Czech Republic is 76 years for men and 82 years for women, but medicine is constantly evolving, and let’s say we still have 20 years after retirement. You will therefore need CZK 5 382 720.
If you start saving in your twenties, you only need to invest just over 1,000 crowns a month. The analyst assumes an average historical stock market appreciation of 8% and a two to three percent annual inflation rate.