Attention those planning to retire! SGK expert warns: When is it more advantageous to retire?

The update coefficient on the date the retirement application is submitted affects the amount of the pension received for life. The Social Security Institution (SGK), when calculating the pensions of employees who are about to retire, acts according to the earnings subject to premiums reported to the institution throughout the person's working life, the number of premium payment days, and the pension accrual rate.

In years of high inflation, the date on which a retirement application is submitted holds great importance regarding the amount of the initial pension to be granted. In this context, Chief Social Security Specialist İsa Karakaş evaluated which retirement date is more advantageous for an İHA reporter.

Karakaş stated that, based on calculations made last year, filing for retirement in 2023 was more advantageous compared to 2024. Pointing out that this year's rates are higher, Karakaş emphasized that this rate is the highest in Turkey's history.

Stating that the resulting rates may vary from person to person depending on the earnings subject to insurance premiums, the number of insurance premium days, and the period worked, Karakaş continued as follows:

When calculating pension salaries, the Social Security Institution's legislation takes the consumer price index (CPI) and the growth rate as a basis. When we consider the CPI and the growth rate for last year, we see that when you submit your retirement application for 2024, taking into account the 2023 inflation rates within this framework, the CPI is 64.77 percent and the growth rate is 4.5 percent.

Accordingly, we can say that the update coefficient is approximately 66.12 percent. In addition to all this data, the raise rate in January 2023 was 37.57 percent based on the CPI. However, the government made an equalization of 11.68 percent, implementing a 49.25 percent raise in January. When we look at July, they implemented a 24.73 percent raise. Therefore, there was a cumulative increase of up to 87 percent in the salaries of SSK and BAĞ-KUR retirees.

How advantageous is it to retire in 2024?

Stating that those who retire this year are more advantageous when comparing 2024 and 2025, Karakaş spoke as follows:

We can say that retiring in 2024 is extremely advantageous compared to 2025. Even though the inflation data for the four months of September, October, November, and December have not yet been finalized and inflation rates have been updated to 41.5 percent in the Medium-Term Program (OVP), we can easily say that even if this rate were 42, 45, or 46 percent, those who retire in 2024 will in any case receive at least 30 percent higher salaries than those who retire in 2025.

Karakaş continued his remarks as follows:

In the calculations I have made, we can say that the difference will vary between at least 31.8 percent and 37 percent. It is an unacceptable discrepancy for an SSK or Bağ-Kur insured individual who has worked for the same duration during the same periods and has had contributions reported to the Social Security Institution (SGK) based on the same earnings subject to premiums to receive a pension that is 30 percent lower simply because they retire on January 1, 2025, rather than in December 2024.

Noting that these rates only concern SSK and Bağ-Kur retirees, Karakaş stated that the difference in question does not apply to civil servant retirees.