As we get older and our health problems get worse, many of us start to think about early retirement. This can be taken as early as three years before the standard retirement age. However, this comes with certain restrictions and conditions must be met. What are the specific conditions? Find out in this article.
An early retirement pension is a special form of old-age pension that you can draw before your normal retirement age under certain conditions. It is particularly suitable for those of us who can no longer work in old age (for example, because of health problems) or for those who can no longer find work. There are two basic conditions for getting it:
Tip: When you are entitled to early retirement and how much you will get in early retirement can be found in the pension calculator on the website of the Czech Social Security Administration.
If you take an early retirement pension, you should expect your final pension to be reduced permanently. The reduction depends on how soon you take early retirement. Specifically, the total amount is reduced by 1.5% of the calculation base for every 90 days spent in early retirement.
So if you take early retirement a year before your retirement age, it will be reduced by 6% (4 x 90 days, with only the full 90 days counting). If we assume that your assessment base was e.g. CZK 20,000, your pension will be reduced by CZK 1,200. As a result, you will only receive 18 800 crowns each month. This amount applies for the entire duration of your pension.
If you don’t want your pension to be reduced, you can opt for an early pension without payout. You can find out exactly how this works in our article.
To apply for an early pension, you must visit the district social security office of your place of residence in person. You can also apply remotely by post or electronically, but even in these situations you must apply in person within six months. A paper application is only used to preserve the date of entitlement to a pension.
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The application must be accompanied by a few basic documents:
The application must be accompanied by a completed and bank-certified form Application for Pension Payment by Voucher in the Czech Republic – Account Holder or Application for Pension Payment by Voucher in the Czech Republic – Spouse’s Account, which can be obtained online at the CSSA website or in person at district social security offices.
Do you know what your retirement age is and how to apply for an old-age pension? Find out in our article.
Your application will be decided by the district social security office where you submitted your application. How long this procedure takes depends on whether they have all the necessary documents proving your period of insurance. If not, the procedure may be extended. However, it generally takes about three months to process.
You can work or run a business in early retirement, but on a much more limited basis. This is because you cannot engage in gainful employment that would give rise to insurance obligations. This limit is set individually for each type of gainful activity:
If you exceed this limit, you will have to repay your pension for that month. For a business, you would then have to repay your pension for the whole year.
These restrictions apply until you reach retirement age. Once you reach retirement age, the same rules apply to you as a pensioner as to a full pensioner, which means that you can also engage in gainful activity that triggers the insurance. After 360 days of such gainful activity, you can apply for an increase in your pension.
How does retirement and employment work for seniors? Find out in the next article.
Based on this information, it can be quite difficult to decide whether or not to take early retirement. So let’s conclude with a summary of the main advantages and disadvantages that might help you decide:
An early retirement pension allows you to draw your retirement pension up to three years before your normal retirement age, provided you meet two basic conditions: reaching a specified age and a minimum period of pensionable service (40 years). However, it is permanently reduced by 1.5% of the calculation base for every 90 days of early retirement and work is only allowed up to a limited amount of income, otherwise you risk losing your pension entitlement for that month or year.
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