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The monitoring project analysing the financial well-being of the future elderly brings together the existing studies and, as a result, the scenarios for funding old age will be developed. Besides that, significant developments and decision points, and their impact, will also be discussed.

Everywhere in the developed world, the increasing life expectancy of people and the birth rates below replacement level have begun to cause concern as to how to ensure the sustainability of the current pension system. Estonia is no exception against the backdrop of European Union countries or the rest of the developed world, and this is also confirmed by the Estonian population projections produced in recent years.

The background analysis of the topic shows that the financial subsistence of the elderly has been in the focus of various stakeholders for a long time already. The primary starting point for this analysis is to take into account the current results and to rely on them in further analysis.

However, the research path cannot focus on a system based only on pension pillars. Although we presume that the current system will continue, it must be viewed together with other options for ensuring subsistence for old age. Schemes may vary from investment on own initiative and making capital investments (for example, investment in real estate) to solutions created by private providers. On the background, the people’s attitudes, expectations and skills cannot be left aside either. For example, people’s financial literacy throughout their lifespan, but also their financial behaviour in advanced age (for example, granting of one’s apartment ownership to one’s relatives instead of selling the ownership and securing one’s old age in a smaller housing or a care home) are important as well. In conclusion, attitudes and values, and the ability to visualise one’s old age also have a role to play. For example, do people presume that one should also work, if possible, while receiving a pension, or not?

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Published: 04.03.2019

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