How the Italian pension system works
For employees the state pension is paid by INPS and, for all contributions from 1996, follows the sistema contributivo: every year 33% of your gross pay is credited to your montante contributivo, a personal account (if your career started after 1995, only up to the massimale of €122,295). The montante is revalued with nominal GDP growth – assumed here to match wage growth unless you change it – and at retirement multiplied by the coefficiente di trasformazione for your age: 5.608% at 67 under the 2025–2026 table, 5.514% from 2027. The pension is paid in 13 instalments. Years before 1996 fall under the older retributivo method, only approximated here as 2% of today’s salary per year.
The old-age pension (pensione di vecchiaia) needs at least 20 contribution years and starts at 67 years in 2026, rising to 67 years 3 months by 2028; later requirements are not yet fixed. At any age you can leave with the pensione anticipata after 42 years 10 months of contributions (41 years 10 months for women) or, if your career began after 1995, from 64 with 20 years and a pension of at least three times the assegno sociale (€546.24 a month, a provisional 2026 figure); that this age rises with life expectancy after 2026 is an assumption, not yet confirmed. For exact figures, enter the monthly pension from INPS “La mia pensione futura” or the montante from your estratto conto.
Supplementary saving runs through a fondo pensione. If you enter nothing, no fund is counted; otherwise enter the annuity from your fund statement, or your monthly contributions (own plus employer), your balance and whether your TFR – severance pay of 6.91% of salary a year – goes to the fund. TFR left with the employer is a lump sum and is not counted. The calculator adds the pillars, compares them with your target share of your last salary and shows the monthly saving: first into the fondo pensione, deductible up to €5,300 a year including employer contributions (TFR excluded), payouts taxed at 15 % falling to 9 % after 35 years, then as unrestricted saving.
Pensions are subject to IRPEF with a special pension deduction plus regional and municipal surcharges; no social contributions are due, and INPS pays the pension in 13 instalments. Pension-fund annuities pay a lower substitute tax instead.