For many Romanians, life abroad has been a dream come true. The opportunity to experience different cultures, learn foreign languages, and build a career in a different country has been a great chance for many. However, when it comes to retirement, many of these same individuals are opting to return to Romania. This article looks at why this is and the advantages of doing so.
Working Abroad and Retirement in Romania
Romania has seen a steady flow of citizens leaving the country over the past few decades in search of better opportunities abroad. This has been especially true since the country joined the European Union in 2007. Many Romanians have taken advantage of the freedom of movement within the EU to find work in other countries.
However, when it comes to retirement, many of these same individuals are beginning to look to Romania as a potential place to settle down. This is due to a number of factors, including better quality of life, lower cost of living, and the familiarity of their home country.
Benefits of Returning Home to Retire
For many Romanians, the prospect of returning home to retire is an attractive one. Not only does it provide the chance to be closer to family, but there are also a number of financial benefits to be gained.
The first is that returning to Romania allows individuals to take advantage of the country’s pension system. This can provide a much-needed financial cushion in retirement, especially for those who have spent many years abroad and may not have been able to save as much as they would have liked.
Another major benefit of returning to Romania is the lower cost of living. Many of the country’s cities are much cheaper than their counterparts in other parts of Europe, meaning that retirees can stretch their pension further. This can be especially advantageous for those who are looking to downsize their lifestyle in retirement.
Finally, returning to Romania can also provide retirees with the chance to enjoy a better quality of life. The country has a thriving cultural scene, a rich history, and beautiful landscapes. This can all combine to provide a great environment for those looking to enjoy their retirement.
For many Romanians, returning home to retire can provide a great opportunity. Not only can it provide a much-needed financial boost, but it can also provide the chance to enjoy a better quality of life in their home country. As such, it is no surprise that many of those who have spent years abroad are now looking to Romania as a potential place to settle down in retirement.
The Romanian pension system has been undergoing drastic changes as a consequence of the aging-population in Romania. As a result, people who have been working abroad and plan to come back to Romania once they reach pension-age must start preparing for the changes.
For the majority of Romanians, State Pension Points (Pilonul III) represent their main source of income in retirement. Until recently, those planning to retire in Romania after working abroad for several years could benefit from an additional bonus. This bonus, known as the ‘death bonus’, was calculated based on an individual’s total contributions to the pension system and allowed for significantly increased incomes.
However, due to new law changes, Romanians who have worked abroad and retired after 2019 will no longer receive this bonus. This affects both old pensions and newly approved pensions, as they must now be calculated without the ‘death bonus’.
In spite of this, retirees who have worked abroad have the right to additional income supplements such as the Guaranteed Minimum Pension and the Pension Supplemental Income. These supplements are based on the number of contributions made to the Romanian Pension Fund and the individual’s average salary over the past 10 years.
Retirees planning to come back to Romania must also consider the fact that their income levels will be considerably lower when compared to other countries. This is due to the fact that the Romanian pension system does not provide the same level of retirement benefits as other developed countries.
In conclusion, those who plan to return to Romania to start their retirement must take into account the considerable changes in the Romanian pension system. Additional supplements may be available, but Romanians who have worked abroad and retired since 2019 should no longer depend on the ‘death bonus’ in order to sustain themselves financially in retirement. Therefore, it is important for those affected by the law changes to plan ahead and ensure that their retirement income is secure.