Is It Possible to Purchase Missing Insurance Service Years: Essential Information for Ukrainians Planning Retirement
Ukrainians who have reached the eligible age and accumulated the required insurance experience have the opportunity to receive their due retirement benefits based on age.
However, what options are available for those who fall short of the necessary years of service? By 2025, a minimum of 32 years of insurance contributions is required for retirement by age.
The publication «Na penziy» explored in detail whether it is possible to buy additional insurance years, especially for 60-year-olds who are close to the required threshold.
Typically, the cost of purchasing one month of insurance service is calculated based on the minimum wage, which in 2025 will be 8,000 hryvnias.
Contributions amount to 22%, so for one month of service, it equals 1,760 hryvnias.
If someone needs to buy an extra three years and ten months (totaling 46 months), the cost would be approximately 80,960 hryvnias.
According to calculations, if the pension is around 8,000 hryvnias per month, this investment can pay off in roughly a year, after which the retiree will receive full pension payments.
Investing these funds in the short term thus allows for a quick recoupment of expenses and ensures stable income after retirement.
So, when is it better to wait if the service years are not enough? If a person does not make additional payments, they can only retire upon reaching 63 years of age.
As a result, they lose three years of full pension payments, which amounts to more than 288,000 hryvnias—this is the cost of the lost time.
Considering an 8,000 hryvnias monthly pension, the missed income over three years exceeds 288,000 hryvnias, not accounting for possible indexations and recalculations.
For example, a 60-year-old man with a deficit of 3.9 years of insurance experience needs to spend about 80,960 hryvnias to buy this service, but he loses the opportunity to gain over 288,000 hryvnias by waiting another three years.
This raises the question: is it more advantageous for pensioners to invest in buying extra years or to wait and lose significant sums? All details regarding the possibility of purchasing additional insured years and their impact on pension size are considered separately.