The key benefit retirees can gain from choosing self employment is a different treatment by tax authorities compared to ordinary working citizens. This means a retiree can keep earning money, pay a modest 4-6% tax, and still receive a pension. This perspective is reflected in comments from a high-ranking official who noted the practical implications for older Canadians and Americans exploring similar paths in their own economies.
One notable advantage is that part of the transferred professional income tax is automatically directed toward health insurance for self employed individuals. This helps ensure medical coverage without additional administrative steps. A second benefit is the absence of a mandatory cash register requirement, ongoing maintenance costs, and the need to transmit data to the tax office. For retirees who choose self employment, there is no obligation to submit routine reports.
In addition, a special deduction can apply until the tax due reaches a threshold of ten thousand rubles. This creates a cushion for retirees who are balancing income with living costs, making the regime more accessible for older adults who want to stay active in the workforce.
However, there is an important consideration about pension calculations. If a retiree remains self employed, that period is treated as non working when it comes to pension accrual. Pension levels rise only when contributions to the Social Fund are paid. In such cases, the retiree is viewed as an employed person, and while pension payments can grow, they may not be indexed to the subsistence level in the same way as for those who meet other contribution criteria.
Forecasts for the self employment regime in the country indicate that the program will continue through the end of 2028 unless the government issues an extension. This timeline gives retirees and potential new participants time to plan, save, and adapt to the rules while considering long term retirement income.
Where the policy stands now, many retirees are weighing the option of self employment as a practical path to supplement their fixed pension, take advantage of lower tax rates, and retain a level of financial independence. The approach also highlights how a stable, cautious balance between work and retirement can coexist, as long as contributions and deductions are managed thoughtfully.