Every year, thousands of people retire after a long working life. For many, it is a time you long for when you look forward to enjoying life. Others rather feel that it feels difficult and sad to leave professional life.
The decision to retire can thus be difficult to make. Some do not hesitate at all, others take early retirement, while some instead choose to continue working for a few more years, and become so-called job bonaires.
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The orange envelope from the pension authority with information on pension and basis for calculating pension rights is sent out every year. Photo: Fredrik Sandberg/TTPensioneskonomen: It affects your pension
Dan Adolphson Björck works as a pension economist at minPension. In an interview with News24 he explains how you can effectively but safely try to increase your future pension.
He explains, among other things, that many people often dream of reducing working hours at the end and that they then equate it with a contemporary pension withdrawal. But as a professional, it is the time in your working life, the salary you earned, how many years you paid taxes and whether you have an occupational pension that determines how large or small the future pension payment will be.
– Here it may be wise to stay afloat with a lower salary during this period and wait with the pension withdrawal until you do not work much anymore or have completely left the labor market. The monthly amounts are then added up because you have been working for a longer period of time and a shorter period of time as a pensioner. The tax also drops on both salary and pension income from January 1 of the year you turn 67, he says and continues:
– Today, private saving takes place in most cases outside the pension system, often via investment savings accounts or through amortization of mortgages. For those with high salaries, over SEK 52,000 a month, salary switching can be an option if the employer allows it.
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Pension economist Dan Adolphson Björck is clear that private pension savings do not replace occupational pensions. Photo: Press image minPension/Urban Jörén & Henrik Montgomery/TT
But in order to succeed in increasing the pension, there are certain elements that are crucial in order to get more in pension payments in the long run, says Adolphson Björck.
– A private savings does not replace the occupational pension. The occupational pension is too large and important for that. Many also talk about private savings as compensation for the fact that one’s partner has a lower salary or works part-time. The idea is good, but it is unusual to save larger sums for your partner and be able to transfer your premium pension right to your spouse. Everyone who lives in a couple relationship should talk about how both can have a good working life and pension. You earn your pension yourself, even if you live with someone.
How much will I get in retirement?
A “normal” pension can be around 65 percent of the previous salary. This means that if you had a monthly salary of SEK 30,000, you can expect to receive around SEK 20,000 in pension payments every month, states myPension.
But it doesn’t always look like that. And a small pension affects many future and current pensioners when the money is not always enough. One such example is those who have become in debt to the Kronofogden.
The number of people over 65 who have debts to the authority has increased significantly. Over 55,000 people over the age of 65 have debts, and in total the joint debts amount to over SEK 25 billion.
So, how much do you actually get in retirement? It depends on several aspects.
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So much more I can get in retirement
If you find it difficult to cope with everyday life due to a low pension payment, if possible, an alternative could be to become a job holder.
Länsförsäkringar’s pension economist Trifa Chireh emphasizes in an interview with Nyheter24 how big an impact it can actually have.
– If you have the energy and opportunity, continue to work extra after 66. The combination of work and pension is very tax-advantaged, meaning you keep more of your earned capital each month and continue to earn for retirement, she says.
In concrete terms, this means that you can increase both your income and your future pension, says Chireh.
– For example, at the age of 67, an income of SEK 36,000 gives approximately SEK 25,200 a month net in pension. If you work 50 percent and draw 50 percent pension, you can get SEK 31,000 a month net. This provides both economic and social benefits, she concludes by telling Nyheter24.
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Trifa Chireh is a pension economist at Länsförsäkringar. She believes that you can earn thousands if you have the opportunity to work a few extra years. Photo: Press image Länsförsäkringar
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