Partial early old-age pension

Partial early old-age pension is a flexible type of pension that offers an ageing employee the opportunity to make additional earnings or to reduce the amount of work.

Partial early old-age pension in a nutshell

1. Age limit: no earlier than at the age of 61. The minimum age rises to 62 for those born in 1964 and gradually for those born later.

2. Amount: 25% or 50% of the accrued pension.

3. Application: submitted approximately two weeks before the intended retirement.

One condition for the granting of partial early old-age pension is that you are not receiving any other form of earnings-related pension.

Handle your pension matters online

In Elo’s Online Service, you can do the following:

Get an estimate of your partial early old-age pension and the subsequent old-age pension amount.
Apply for partial early old-age pension.
Take the paperless service into use and access your documents electronically.
If you are a pension recipient, you can print out a pension certificate, increase your tax rate and report any changes that affect the payment of your pension.

Withdrawing part of one’s accrued pension in advance

If desired, you can withdraw part of your accrued pension as partial early old-age pension at the age of 61 or any time afterward up until you reach your highest pensionable age. The minimum age for partial early old-age pension will increase to 62 in 2025 and continue increasing gradually thereafter.

You can apply for the payment of 25% or 50% of the pension accrued by the end of the previous year. If you initially opt to take only 25% as the partial early old-age pension, you can change your mind and apply for payment of the other 25% of the accrued pension at a later date. The change is not possible the other way around.

Partial early old-age pension will always reduce your final old-age pension amount in comparison to that which you would receive if you continued to work full-time until you retired on old-age pension. Before applying for partial early old-age pension, it would be wise to get an estimate from the Online Service of the amount of your partial early old-age pension and subsequent old-age pension amount.

Information on how the partial early old-age pension and earnings are taxed is available from the tax authorities.

Working alongside partial early old-age pension

The eligibility for partial early old-age pension is not bound to your working status. You can continue working as usual or you can opt to reduce your working hours if you agree on it with your employer. You also have the right to this pension even if you are not working at all. The pension provider does not monitor your earnings or the amount of work you do, since neither has any effect on the amount of the partial early old-age pension.

If you become ill or unemployed during the time when you are receiving the partial early old-age pension, the payments of this pension will continue regardless of your situation. Partial early old-age pension does not affect the amount of the Basic Unemployment Allowance received from Kela, the earnings-related unemployment allowance from an unemployment fund or the sickness allowance from Kela. The partial early old-age pension may, however, affect your labour market subsidy. Further information about the labour market subsidy and other benefits from Kela are available from Kela.

If you are a self-employed person and your entrepreneurial activities will continue after you begin receiving your partial early old-age pension, your YEL insurance policy must remain valid. You will determine your YEL income on the basis of your work input as usual. An employee’s employment relationship must also be insured alongside partial early old-age pension.

Additional old-age pension will accrue from work done alongside partial early old-age pension or, correspondingly, from YEL income at a rate of 1.7% per year up until one turns 63, after which the accrual rate is reduced to 1.5% per year.

Partial early old-age pension prior to the lowest pensionable age

The amount of partial early old-age pension paid to you is reduced by 0.4% for each month short of your pensionable age for old-age pension. This reduction will have a permanent effect on your final old-age pension as well. If you work alongside partial early old-age pension, additional pension will be accrued from this work.

You can shift to standard old-age pension once you have reached your lowest pensionable age for old-age pension. Your final old-age pension will, thus, be comprised of the partial early old-age pension, in which the reduction for early retirement is taken into account, and the rest of your accrued overall pension.

Partial early old-age pension after the lowest pensionable age

If you apply for the partial early old-age pension only after you have reached your lowest pensionable age, the pension payments will not be affected by the reduction for early retirement. In contrast, you will receive an increase for the deferred retirement, which amounts to 0.4% for each month that exceeds your lowest pensionable age.

Later, when you retire on standard old-age pension, your final pension will include the increase for the deferred retirement for those months during which you received partial early old-age pension.