Your pension can be affected by many different things. The Swedish pension system is currently structured in three primary parts: first and foremost the general pension, to which everyone who has lived or worked in Sweden is entitled. Then there is occupational pension, which you are entitled to if your employer offered it to you in the employment. Finally, there is your own pension savings, which you control yourself.
In fact, it can be really profitable for you, if the opportunity exists, to continue working for a while after reaching retirement age. The reason is that as long as you are working, you earn money for the pension, which means that in a couple of years it can quickly become a couple of thousand extra in pension payments once you stop working.
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The pension is affected by the form of employment
On its website, the authority now explains that you who are still working can have your pension affected in additional ways. Namely, working part-time can result in lost pension savings over time.
And although the reasons for working part-time can be many, your pension is affected. Should it be for a limited time, however, you can breathe a sigh of relief as the pension will not be affected very much over time. However, it is when you work part-time for a longer period that it can negatively affect the future private finances.
“Reducing working hours for a limited period does not affect the pension that much. If, on the other hand, you work part-time for many years of your working life, you will earn less for your pension. Part-time work can also mean that you get a worse salary development and thus a lower pension,” writes the Pensions Authority.
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Photo: Pontus Lundahl/TT
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30 years? Then you can lose 2,500 in pension – every month
However, it is not only the Swedish Pensions Agency that explains how the pension can be negatively affected in the long term if you work part-time for a longer period of time. On SEB’s website, the Swedish major bank also writes that long periods of part-time work during working life have negative effects on your future payout.
According to their calculation, it could be thousands of Swedish kroner every month that you miss out on in pension money.
If you have a monthly salary of SEK 30,000 a month and are in your 30s today, at the same time you work part-time and expect to do so for a ten-year period in the future, then your pension can be reduced by as much as SEK 2,500 a month for 20 years compared to with if you had worked full-time.
If you wanted to meet that amount, it would require you to save SEK 3,000 a month for five years to get the total amount together.
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Photo: Janerik Henriksson/TTThen you can lose 2,900 a month in pension
If your monthly salary, before tax, were instead SEK 40,000 a month before you switch to part-time work, then your future pension would be reduced by SEK 2,900 a month for 20 years. This is also taken into account if you are in your 30s and expect to work part-time for at least ten years to come.
But how much would the pension be reduced if you instead find yourself in the middle of working life? According to SEB’s calculation, you can lose SEK 800 a month for 20 years, which corresponds to SEK 192,000 in total. This is calculated if you are 50 years old, have a monthly salary of SEK 30,000 before tax before part-time work and plan to work part-time for the next five years.
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Source: SEB
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