# Retirement: what the state gives and what you add

> How much to save for retirement: the insurance record a pension needs, why the state pension is a floor, and how much a monthly amount can grow to over 20 or 30 years.

- Course: [Personal Finance: Budget, Safety Cushion, Debt and Investing](https://productovi.com/courses/personal-finance.md)
- Module: What am I saving for?
- Lesson 30/32, ~19 min
- Source: https://productovi.com/courses/personal-finance/retirement

## How many years of insurance record a pension needs

**Alex Tutor:** You're still helping Dana, and today she looks much further ahead.

**Dana:** I'm 30. Retirement feels like science fiction. Won't the state pay something anyway?

**Alex Tutor:** It will, if you have enough **insurance record**: years of paid social contributions. As of 2026, a pension at 60 needs 33 years for those turning 60 this year; with less, later: 23 years at 63, 15 at 65. The schedule raises that to 35 years by 2028.

**Alex Tutor:** That's the **state pension**, paid from the contributions of people working now. Alongside it are voluntary private pension funds; as of September 2026 there is no mandatory personal retirement account. Rules change, so check them every year.

**Sofia:** Dana is a sole proprietor. Do her months count?

**Alex Tutor:** Months when she pays at least the minimum **unified social contribution (ESV)** count: 1,902.34 UAH a month in 2026. Dana started at 22, so she has about 8 years.

> **Exercise:** Dana is 30 and has 8 years of insurance record. If the requirement for a pension at 60 is 35 years and she keeps paying every month, **at what age** will she reach 35 years?

## A floor, not the whole house

**Dana:** 57. Fine, so I'm covered?

**Alex Tutor:** Covered for getting a pension, if she keeps paying and the rule stays at 35. The amount depends on the record and on what was paid in, and nobody can promise today what it will buy in 30 years.

**Alex Tutor:** In autumn 2026 a reform that would add voluntary funded savings was being prepared, but it isn't law yet. So treat the state pension as a floor, not the whole house. Your own part is what you control.

**Sofia:** How big should Dana's own part be?

**Alex Tutor:** Count in today's money, so inflation is already out of the way. Say 2,000 a month from 30 to 60, and a **real return** after inflation and fees of 0%, 2% or 4% a year.

$$
\text{pot} = P \times \frac{(1 + r)^{n} - 1}{r}
$$

*P: the monthly amount; n: the number of months; r: the monthly real return, (1 + R)^(1/12) − 1 for a yearly R. With R = 0 the pot is simply P × n.*

> **Exercise:** Dana puts aside 2,000 UAH a month from 30 to 60 (360 months) at a 0% real return. What does the pot reach, in today's money?

## A range, not a promise

**Alex Tutor:** At 2% a year after inflation and fees, the same 2,000 a month grows to about 982,527. At 4%, about 1,370,541. Neither is guaranteed: some years are negative, and 4% after all costs is an optimistic case.

**2,000 UAH a month, in today's money**

| Real return a year | Start at 30 (30 years) | Start at 40 (20 years) |
| --- | --- | --- |
| 0% | 720000 | 480000 |
| 2% | 982527 | 588463 |
| 4% | 1370541 | 727683 |

*What the pot reaches at 60, starting at 30 or at 40, for three real returns after inflation and fees. A range, not a forecast.*

**Sofia:** The bars for starting at 30 are much taller, and not just by the extra 240,000 put in.

**Alex Tutor:** Because early money has the most time to grow. Time is the one ingredient you can't buy later.

**Dana:** And if I wait until 40 and start then?

**Alex Tutor:** Twenty years instead of thirty. Work it out at 2%.

> **Exercise:** If Dana starts at 40 instead: 2,000 UAH a month for 20 years (240 months) at a 2% real return a year. The monthly rate is r = 1.02^(1/12) − 1 ≈ 0.0016516. Use pot = P × ((1 + r)ⁿ − 1) / r. Round to whole hryvnias.

## From a pot to a monthly number

**Sofia:** About 588,463 against 982,527. Waiting ten years costs about 394,000, though she'd put in only 240,000 less.

**Alex Tutor:** Now turn a pot into a monthly number. Spread it over 25 years of retirement, 300 months: 982,527 ÷ 300 ≈ 3,275 a month in today's money. Rough, but it shows the scale.

**Dana:** 3,275 on top of the state pension. Not luxury, but not nothing.

**Alex Tutor:** The pot can keep earning in retirement and last longer, or returns can be worse. It's a guide for choosing the monthly amount, not a promise.

> **Exercise:** Which choice does Dana control that changes her own retirement pot the **most**?

## Tax back for employees

**Sam:** I'm an employee at Klasna. Someone told me private pension contributions get tax back.

**Alex Tutor:** For salary income, yes, as of 2026. Your own contributions to a **voluntary pension fund** can go into the yearly tax discount, which returns 18% **personal income tax** on them, within limits: up to 4,660 UAH a month of your own contributions in 2026.

**Alex Tutor:** It's tied to salary, so Dana on the single tax generally can't use it. Check the current rules and the deadline for claiming before you count on it.

**Sofia:** So if Sam puts in 1,000 a month, part of it comes back once a year.

> **Exercise:** Sam, an employee, puts 1,000 UAH a month into a voluntary pension fund. As of 2026 the tax discount returns 18% personal income tax on own contributions within the limit (4,660 a month). How much comes back **for the year**? In UAH.

## Your turn: Dana's retirement lines

**Dana:** So what's my plan? Honestly, in a few lines.

**Alex Tutor:** Four lines: keep the record growing, a monthly amount for her own part, the range it might reach, and a yearly check.

**Sofia:** And retirement money stays apart from the cushion.

**Alex Tutor:** Yes. Where the money sits is the investing module's question: risk, fees, no promises. And this is education, not personal advice: check current rules and your own situation.

> **Exercise:** Write Dana's retirement plan in four lines: keeping the insurance record, the monthly amount for her own part, the range it might reach by 60 (with the real returns you assume), and how she will check it each year.

> **Key ideas**
>
> - As of September 2026: the state pension plus voluntary private funds; no mandatory personal retirement account. A reform was being prepared but isn't law.
> - The pension at 60 needs a long enough **insurance record**: 33 years in 2026, set to rise to 35 by 2028 under the current schedule (check). A FOP's months count when at least the minimum ESV is paid.
> - The amount can't be promised: plan the state pension as a floor.
> - Count your own part in today's money with a range of real returns: 2,000 a month for 30 years is about **0.72–1.37 million UAH** at 0–4%; starting at 40 gives about 0.48–0.73 million.
> - Spread over 300 months, 982,527 is about 3,275 a month: a guide, not a promise.
> - Employees can get 18% personal income tax back on own contributions to a private pension fund within limits (2026: up to 4,660 a month); single-tax FOPs generally can't.
> - Education, not personal advice: check current rules.

**Alex Tutor:** Next: money with a partner. Two people, two incomes, one plan.

- Previous lesson: [Goals with a price and a date](https://productovi.com/courses/personal-finance/goals-with-a-price-and-a-date.md)
- Next lesson: [Money and a partner: joint, separate or both](https://productovi.com/courses/personal-finance/money-in-a-couple.md)

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