How Much Should You Have Saved in Your Pension Fund Based on Your Age?
The Dismal Future of INPS Pensions
The outlook for the INPS pension scheme looks bleak, making it increasingly urgent to consider private pension funds.
Currently, only 36.9% of the Italian workforce has opted for supplementary retirement plans, as reported by Covip, with an average annual contribution of €2,810.
How Much Do You Really Need?
The question arises: how much should one have saved by the ages of 30, 40, 50, and 60 to ensure a decent pension from a private fund? This analysis requires establishing example income ranges since lower incomes translate to less capital for future investments.
Assuming an average annual return of 3% and an optimistic life expectancy of 87 years, individuals should aim for a net pension fund income that covers at least 70% of their working income.
Required Savings by Age
Based on a monthly salary, individuals need to have the following amounts saved by age:
- At 30 years: €15,000 (1,500€/month), €20,000 (2,000€/month), €25,000 (2,500€/month)
- At 40 years: €50,000, €66,000, €83,000 respectively
- At 50 years: €120,000, €160,000, €200,000 respectively
- At 60 years: €250,000, €330,000, €415,000 respectively
Monthly Contributions Needed
To reach these targets, the following monthly contributions are advisable:
- Starting at 20 years: €60-70 (1,500€/month), €90-110 (2,000€/month), €120-150 (2,500€/month)
- Starting at 30: €100, €150, €200 respectively
- Starting at 40: €200, €300, €400 respectively
- Starting at 50: €350, €450, €550 respectively
- Starting at 60: €500, €700, €900 respectively
Currently, the average monthly contribution among Italians enrolled in pension funds is approximately €234.
Recent Trends in Pension Fund Participation
Encouragingly, participation in pension funds saw a positive trend in 2023, with 9.6 million individuals enrolled, a 3.7% increase from the previous year.
Yet still, only 36.9% of Italian workers have joined a supplementary pension fund.
The demographic split shows 73% of participants are employees, while self-employed individuals represent just 12.4%.
Gender imbalance is significant, with men making up 61.7% of participants.
Age-wise, almost half of the enrollees (47.8%) are between 35 and 54, while 19.3% are under 34, indicating a growing awareness among younger generations.
In total, contributions to supplementary pensions reached €19.2 billion in 2023, reflecting a 5.2% rise compared to the previous year.
