Since 2021, retirement in Estonia has been flexible. During this time, a flexible pension has been granted to nearly 9,000 people. Of these, 85 percent used the option to retire early, said Kadri Tomingas, head of the external benefits division at the Social Insurance Board.

Taking early retirement through the flexible pension scheme cuts monthly benefits by as much as 31 percent. Flexible pensions can be taken up to five years before the normal retirement age and at any time after the retirement age. To retire earlier, you need to have more years of pensionable service.

Job-seeking can still go on

"Choosing an early pension can be caused by events in people's lives. For example, if a person is up to five years away from old‑age pension age, maybe a little less, loses their job and cannot find a new position for a long time. In that case, the flexible old‑age pension is a solution because it provides the person with health insurance and a monthly income," Tomingas explained.

Data from the Social Insurance Board show that flexible pensions are most often chosen three to four years before pension age, but this does not necessarily mean that job‑seeking ends.

"Up to 36 percent of those who have chosen a flexible pension continue working," Tomingas said. According to her, this is the advantage of the flexible pension: if a person retires early but their situation improves and they find a good job, they can pause the flexible pension payments, go to work, and at the same time the employer pays social tax for them.

"They accumulate additional pension rights, and if the opportunity to work disappears, they can choose to resume receiving the pension," Tomingas said.

Of the unemployed registered with the Unemployment Insurance Fund, roughly one in ten is older than 60, and about half of them find work, said Ulla Saar, member of the management board of the Unemployment Insurance Fund.

Unemployment decreased in the second quarter

"As of August, we have almost 40,000 unemployed registered, and about 4,000 of them are sixty or older. It must be said that half or a little more leave us for a positive reason — they have found a new job," Saar said.

According to the Unemployment Insurance Fund, the main reason older workers take longer to find a new job is health.

"If they can no longer continue doing their previous work, they need time and investment in retraining to find a new field and a new challenge," Saar said. She added that there have also been great success stories: "For example, one person took a Photoshop course with us, also attended photography courses on their own, and left our register because they became an entrepreneur — starting a new job as a photographer at age 60."

Saar acknowledged that age discrimination exists in Estonia. Studies by the Unemployment Insurance Fund show that employers prefer younger workers. According to Saar, lack of skills and education occurs among jobseekers of all ages. Unemployed people over 60 most often find work in service roles, such as in shops.

Retraining an option for some

More and more older jobseekers are willing to retrain. Saar recommends employers who complain about labor shortages to consider more flexible work arrangements.

"With employers, we see that for people over sixty — but actually also in other age groups — many have caregiving responsibilities, for example aging parents or small children. Then they need flexible opportunities to work, but not all employers who could offer such flexible or part‑time work arrangements actually do so," Saar said.

"For example, with people aged 60+, we actually want them to have the opportunity to work even after retiring, even part‑time. Here we do have a concern: there are not as many part‑time positions as there are people interested in them," the Unemployment Insurance Fund board member noted.

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