As a new, young entrepreneur, it may be difficult to get a holistic idea of your future and the importance of planning it. Retirement age seems to be far ahead in the future. However, entrepreneurs need to think about their old-age pension right from the start of their business activities.
The amount of entrepreneurs’ pension is based on the total earnings they have accumulated during the time they were running a business. The basis of the calculation is the confirmed YEL income, but also potential increases or decreases in pension insurance contributions are considered. As you are running your business, your pension accumulates based on your annual YEL income. The annual percentage of pension accumulation is 1.5 per cent.
The higher YEL insurance contributions you pay, the greater a pension you will get. For this reason, too, it is important to keep your YEL income at the proper level. Increasing your YEL income during the last years before retiring does not substantively improve the amount of your pension.