Working Longer Could Lower Your Pension
One of the most puzzling issues for employees who first became insured under the scope of 4/a (Social Security Institution) between September 1999 and April 2008, is the relationship between the number of premium days and the retirement pension. Contrary to popular belief in the public, paying more premiums in the social security system does not always mean a higher retirement pension. Social Security Institution expert Özgür Erdursun pointed out that working excessively could potentially lower the retirement pension.
Two distinct paths to retirement.
For insured employees who started their jobs between September 9, 1999, and April 30, 2008, the Social Security Institution (SSI) offers two primary retirement options. The first option requires women to be at least 58 and men to be 60 years old, in addition to completing 7,000 premium days. The second option maintains the same age conditions (58 for women, 60 for men), but only requires 4,500 premium days and a 25-year insurance period.
For an employee who has completed 4,500 premium days and a 25-year period and is waiting to reach the required age, working up to 7,000 days just to increase their monthly pension might not be advantageous in every scenario. The additional 2,500 days of premium payment does not automatically result in a pension increase, but can have a negative impact depending on the individual's average past earnings.
Working excessively could potentially decrease your retirement pension.
The primary criterion in calculating the retirement pension is not how many days one has worked, but over what 'income subject to premium' (ISP) the paid premiums were reported.
If a person who has paid premiums over high earnings in the past and has reached 4,500 days completes the remaining 2,500 days at a level close to or at minimum wage, the overall average income decreases. This situation leads to a decline in the calculated base monthly pension.
For employees whose income subject to premium is approximately 2.5 times the minimum wage or more, additional premium days increase the pension. The most significant positive effect is seen in those who pay premiums from the maximum income.
Social Security expert Özgür Erdursun explained the situation as follows:
'Do those who first started their insurance between September 9, 1999 and April 30, 2008 receive a lower pension with 4500 premium days, or in other words, will those who complete 7000 premium days receive a higher pension?
Answer: No.
In fact, the opposite result can occur for some employees. Despite working more and paying more premiums, a person can reduce the pension to be granted in the future.
The determining factor here is not just how many days of premiums were paid, but over which income the premiums were paid. Continuing to pay premiums over the minimum wage and income close to it, especially for those who have premiums from high earnings in the past, can lower their average earnings, leading to a decrease in the calculated base monthly pension.'
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