Old-age pensions represent one of the largest items in the state budget and there has long been talk about the unsustainability of the current system.

So most people are starting to prepare for retirement on their own. But the question is, how much money do you need to put aside to ensure a regular annuity for old age? That depends on several factors:

1. The more time you have, the less money you need to put away. This golden rule still works today and the earlier you start preparing for old age, the less of a hit it will take to your monthly budget.
2. Putting money away in a savings account may seem like a great opportunity these days, but in the long run you're depriving yourself of potential returns. Choosing the right product for saving or investing is therefore quite crucial. The more time you have, the more dynamic you can invest.
3. At the same time, you need to think about inflation. If you want a real annuity of CZK 10,000 in 20 years and we assume an average annual inflation of 4%, you need to take into account that you will need at least CZK 22,000 a month at the end to buy what you buy today for CZK 10,000.

Model client Michal
Michal is 50 years old and wants a real annuity of CZK 10,000 for 25 years from the age of 60. He has nothing saved yet. So he decides to make a conservative investment with an expected appreciation of around 3%. To prepare for the annuity, he will need to set aside CZK 33,000 every month for the next 10 years.

Model client Jan
Jan is 40 years old and, like Michal, wants a real annuity of CZK 10,000 for 25 years from the age of 60. So far he has nothing saved. Jan has more time than Michal and can therefore afford to invest his money more dynamically with an expected return of around 6%. To prepare for the annuity, he will have to put away CZK 7,700 every month for 20 years.

Model client Eliška
Eliška is 30 years old and, like the gentlemen, wants a real annuity of CZK 10,000 from age 60 for 25 years. Eliska knows she has plenty of time to invest the money dynamically and therefore expects a return of around 9%. Thus, for the next 30 years, she only needs to set aside CZK 1,700 per month to secure this annuity.

Which of our model clients do you think is most likely to actually achieve their dream annuity?