If you have no employer and pay into employee pension insurance (职工养老保险) yourself, pay at the lowest tier and make sure you build up enough years; don't treat it as a sure profit, because even at the lowest tier it takes about 10 years of collecting to break even
- Moderate value
- Evidence A
- Saves money
- Costs a lot
- Takes minutes
- Long-term effort
In plain words
If you have no employer and pay into employee pension insurance yourself, the best approach is to pay at the lowest tier and build up the full number of years. The bulk of what you receive follows the average wage of the place in the year you retire. Converted at that year's wage level, paying at the lowest tier for 15 years and collecting from age 60, you break even after about 10 years of collecting, and the extra paid at higher tiers takes about 17 years of collecting. It is worth paying in, but it is not a sure profit.
Mentioned in
- Don't panic about a gap in social insurance payments: pensions count cumulative years, and medical insurance can be made up under the rules
- Working outside a company is flexible employment: pay for pension and medical insurance yourself where you work, and household registration limits have been lifted
Translated from the Chinese original. Original book, section 5, tip 46. This section is about money and spending. It is general information, not financial or investment advice. Content may be out of date and rules differ by place. When you actually deal with an agency, a doctor or a court, follow what local officials, doctors and lawyers tell you. Disclaimer