Labor Insurance Tenure of 25 Years Required to Choose Monthly Pension? Calculating Payouts for 15, 25, and 30 Years—Receiving Maximum Retirement Benefits Even Without Employment

When planning for retirement, many people rely not only on employer-contributed and self-funded retirement savings but also on another major pillar: "Labor Insurance Old-Age Benefits." However, despite decades of hard work, many laborers still lack a clear understanding of their Labor Insurance rights.

Exactly how many years of contributions are required to retire? Rumors circulate online claiming that "you cannot choose monthly payments unless you have 25 years of tenure"—but this is entirely false!

According to regulations set by the Bureau of Labor Insurance, anyone with at least 15 years of Labor Insurance coverage who has reached the statutory retirement age qualifies to receive old-age annuities on a monthly basis. In other words, once you have 15 or more years of tenure and are over 65 years old, you can freely choose between receiving benefits as a "monthly pension" or a "lump-sum payment." If your tenure is less than 15 years, you can only opt for a lump-sum payout (Old-Age Lump-Sum Benefit). Do not let misinformation disrupt your retirement plans.

If you choose the "lump-sum option," the number of months paid out is calculated as follows: For every full year of insurance tenure, one month’s worth of your average monthly insured salary is paid. For years exceeding 15, two months’ worth are paid per year, up to a maximum of 45 months.

Tenure Tier Available Payment Method Lump-Sum Months Under 15 years Only lump-sum (Old-Age Lump-Sum) 1 month per year 15 years Choose monthly or lump-sum 15 months 20 years - 25 months (15 + 5×2) 25 years - 35 months (15 + 10×2) 30 years - 45 months (15 + 15×2)

Labor Insurance Retirement Calculation: Example Using Maximum Insured Salary of NT$45,800

If eligible and choosing the lump-sum option, the formula is: Payout Amount = Number of Months × Average Monthly Insured Salary.

Using the current Labor Insurance maximum tier of NT$45,800 as the "average monthly insured salary" over the last three years before retirement:

With 15 years of tenure: 15 months × NT$45,800 = NT$687,000 With 20 years of tenure: 25 months × NT$45,800 = NT$1,145,000 With 25 years of tenure: 35 months × NT$45,800 = NT$1,603,000 With 30 years of tenure: 45 months × NT$45,800 = NT$2,061,000

Note: Since individual salaries vary, substitute your own "average monthly insured salary" to calculate your actual lump-sum amount.

How Much Does Early or Delayed Pension Receipt Affect the Amount?

If you choose the "monthly pension" option, you may elect to start receiving payments earlier or later based on your financial and health situation:

Early Receipt (Reduced Annuity): For each year taken early, the annual amount is reduced by 4%, with a maximum of 5 years early (i.e., 20% reduction).

Delayed Receipt (Extended Annuity): For each year delayed, the annual amount increases by 4%, up to a maximum of 5 years (i.e., 20% increase).

Taking early means receiving smaller monthly amounts but starting sooner; delaying means greater long-term gains the longer you live. It is recommended to assess your personal cash flow needs before deciding.

Which Is Better: Lump-Sum or Monthly Payments?

"Should I take a lump sum or receive monthly payments?" This is a common dilemma faced by many before retirement.

Monthly Receipt (Annuity): From a purely mathematical standpoint, choosing the "monthly annuity" typically results in total cumulative payments surpassing the lump-sum amount within about 7 to 8 years. Given increasing life expectancy, monthly payments offer more stable protection against longevity and inflation risks.

Lump-Sum Receipt: If you possess exceptional investment and financial management skills and are confident in generating returns higher than the Labor Insurance annuity rate, taking a lump sum allows you to maximize capital growth through strategic investments.

How to Check Your Labor Insurance Tenure?

To estimate your retirement benefits, use one of these three methods to check your accumulated Labor Insurance tenure:

Online Inquiry: Prepare your Natural Person Certificate, NHI card number, or Mobile Natural Person Certificate (TW FidO), then log in to the "Labor Insurance Bureau e-Service System" for instant access.

Physical ATM: Use a cooperating bank's "Labor Protection Card" or an enabled "Postal Financial Card" at designated ATMs to query and print your record.

In-Person Service: Bring your original ID document to any county/city office of the Labor Insurance Bureau and request staff to print your details.

Regularly reviewing your Labor Insurance tenure helps you plan for later life early and ensures employers aren’t underreporting high salaries, thereby protecting your rights.

Check via Labor Insurance Bureau e-Service System

Editor-in-Chief / Lin Li