A recent survey conducted by the research agency MindBridge Consulting for Partners sheds light on the retirement savings goals and concerns of Czech citizens, highlighting the need for financial preparedness in an era of proposed changes to the retirement savings system.

According to the survey, the average Czech citizen aims to have saved approximately 1.46 million crowns for a comfortable retirement. However, there are notable gender disparities, with men targeting an average of 1.8 million crowns and women aiming for one million. This reflects a diversity of financial goals and expectations among respondents.

The survey’s findings reveal that households with a net monthly income exceeding 45,000 crowns aim to accumulate around 30 times their monthly income in savings for retirement. In contrast, those with lower incomes seek to secure approximately 70 times their monthly earnings. Nonetheless, the required absolute amount decreases from 1.8 million to 1.23 million crowns when considering the lower income bracket.

Financial advisor Vladimír Weiss emphasizes the individuality of retirement savings needs, which depend on a person’s desired standard of living in retirement. For instance, someone earning a monthly average net income of 30,000 crowns may require up to 2.5 million crowns in savings by age 65 to maintain their current lifestyle.

Despite varying savings targets, a sense of pessimism prevails among Czech citizens regarding the government’s ability to provide a dignified standard of living in retirement. This skepticism is particularly pronounced among younger individuals who are more aware of the government’s limitations in ensuring financial security during retirement.

The survey also reveals a gap between estimated retirement income and actual amounts. Younger respondents aged 18 to 35 underestimated the average monthly pension, estimating it at 78 percent of the actual amount. In contrast, those aged 50 to 65 had a more accurate estimation at around 92 percent of the actual amount, according to data from the Ministry of Labor.

Amidst these considerations, the Czech government is planning changes to the retirement savings system. Proposed changes include adjusting the state contribution threshold from 300 to 500 crowns saved each month, with contribution amounts varying from 100 to 340 crowns. Old-age pensioners would no longer be eligible for the contribution. Additionally, the minimum compulsory savings period for entitlement to the state contribution may increase from five to ten years, and pension companies will be able to create alternative participant funds for supplementary pension insurance.

These changes reflect the evolving landscape of retirement savings in the Czech Republic and the need for citizens to adapt their financial planning to ensure a secure and comfortable retirement.

Article by Prague Forum