All Swedes with any form of income pay income tax, which is automatically deducted and paid from all taxable income.
How much you pay differs depending on how much you have in income, where you live, how old you are and whether you are a member of the Church of Sweden or another religious community. But it is clear that the tax contributes to maintaining the Swedish safety net, which includes everything from unemployment insurance and contributions to care, school and care.
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Changes in the pension system need to be communicated in good time
Something that has been widely discussed for a long time is the tax that the country’s pensioners have to pay. Many believe that pensioners who have worked all their lives should not have to pay any or only a little tax. Others believe that the tax applies to everyone.
As a pensioner, there are also differences from a purely tax point of view depending on the age at which you choose to retire from working life.
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In one press release lifts the SPF Seniors’ Association chairman, Eva Erikssonthe meaning that the pension choices available also affect the payment for you as a pensioner.
Eriksson also criticizes what she considers to be a lack of foresight from the country’s politicians. She believes instead that changes in the Swedish pension system need to be communicated in good time so that more people have time to take part in it. She intends, among other things, that those who continue to work despite reaching retirement age receive greater financial benefits. The rules for those individuals enable an increased employment tax deduction and an increased basic deduction.
– There are people born in 1958 who retired at the age of 63-64, before the political decision was made and with the tax information that was available at the time. Now they have to wait another year before the tax is reduced for them, but there was no information about this when they retired, says Eva Eriksson.
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Photo: Malin Hoelstad/SvD/TT That’s how big the difference in tax is – depending on when you retire
But how much does the pension paid differ depending on when you choose to retire? According to the SPF Seniors’ calculation, it turns out that the tax drops significantly if you continue to work after the age of 67.
Those who have a total pension of SEK 15,000 a month pay SEK 3,702 in tax before the age of 67, according to their calculations. But those who instead choose to retire after 67 pay only SEK 2,110. This means that the difference will be SEK 1,592, in pure tax deductions, if you wait to retire.
Those who instead have a pension of SEK 25,000 a month and retire before the age of 67 need to tax SEK 7,123. Those who instead wait until after age 67 pay only SEK 4,694. There is a difference of SEK 2,429.
In conclusion, their calculation shows that people with a total pension of SEK 35,000 a month need to pay SEK 10,643 in taxes before the age of 67. Those who then wait to retire until after age 67 pay only SEK 7,371 – a difference of a whopping SEK 3,272 in tax each month.
– Since there is a difference of around SEK 2,000 per month in the wallet, it is especially important that people become aware of their choices before retirement, Eva Eriksson emphasizes in conclusion in the press release.
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