An expert told how to save up to a million euros for retirement

The Rus.Postimees article details a strategy for Estonians to accumulate a pension capital of one million euros. According to Wahur Madisson, a fund manager at Luminori pensionifondid, achieving this goal is attainable for many if initiated in youth, adhering to an investment plan, and maintaining consistency. Madisson suggests utilizing a calculator to determine the necessary investment contributions, noting that consistent earnings, at least the average Estonian gross salary (1981 euros as of 2024), and a disciplined approach can make the target achievable.

Initial calculations indicate a monthly investment of approximately 400 euros, representing 20% of income, would be required with a 5% annual return over 40 years. Madisson emphasizes the importance of a diversified investment strategy to mitigate the impact of rising taxes and inflation. He proposes increasing contributions to 6% with a 4% government supplement, potentially covering half of the target amount, and utilizing a third investment tier to reach the full million euros.

Considering a 5% annual return and a 3% annual salary growth, combined investment strategies across the second and third pension stages could still yield a million euros by retirement. Madisson stresses the flexibility of the plan and the importance of ensuring a retirement income of at least 50-60% of previous earnings. He advises starting with available resources, even with limited initial income, to increase the likelihood of a stable retirement income.

The Rus.Postimees article highlights the potential for achieving a million euro pension through careful planning and consistent investment.

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