Lithuanian pension system consists of three pillars:
Pension fund managers invest participants' contributions held in 2nd pension pillar fund in accordance with the investing strategy. It means that every saved Euro for retirement is invested to earn extra return.
Funds are divided by their investment strategies: In pursuit of optimum return on investment, we suggest choosing the fund according to your age: for younger people, we recommend a fund investing into shares, and closer to the retirement age – into fund with majority of bonds in its assets, and smaller part of shares to reduce short‑term fluctuations of accumulated asset value.
From 2019, the 2nd pension pillar funds are managed following the life cycle approach. Saving in a pension fund is convenient as it is adapted to your date of birth and selected automatically. The younger you are, the bigger investments into share markets are made in pursuit of bigger return on investment. With the retirement age approaching, the proportion of shares in the fund (and risk) is gradually decreased, while the share of bonds and other safer investment instruments (deposits, money) is increased to protect the saved funds. You are free to choose an investment strategy of your 3rd pension pillar fund, however we suggest following the same life cycle approach: youngers should choose a fund investing into shares, and with the retirement age approaching – a fund with bigger investment into bonds and smaller into shares.
To understand what incomes you can expect when retired, you should analyse your present situation. Consider your salary, savings, investments made by now or other assets. All this could help you to assess your financial situation today and to answer the question, how much extra savings you need. According to financial experts, for financially secure old age, you need 70‑80% of your current monthly incomes. With the help of the pension calculator, find out your future pension. Calculate
If you do not work by employment contract, you should check what potential 1st pension pillar is forecasted for you and if you can join the 2nd pillar. It is very likely that for financially secure old age, you will have to rely more on the 3rd pension pillar funds or other personal savings. More