Yes. You should avoid high-risk savings as you approach retirement age. A good rule of thumb is to not have more than one-quarter of your savings in shares when you retire.
The earliest you can start drawing your retirement pension, partly or fully, is from the age of 63. If you were born in 1958 or earlier, different transition regulations apply. You can work at the same time as you draw your retirement pension.
You can draw your occupational pension when your pension agreement allows you to do so. If you have worked within several sectors, you may have more than one occupational pension.
As long as you work, you earn for the general pension. If you wait to draw a general pension, you will receive more in pension for each year you choose to postpone the pension withdrawal. If you continue to work, you will receive an additional basic deduction from the year you turn 66.
On the Swedish Tax Agency’s website, you can see how the tax is affected depending on how large a pension you plan to draw. The cut-off point for 20% state income tax is at an annual income of SEK 613,900. From the year you turn 67, the cut-off point is SEK 683,200. The breakpoints refer to the income year 2023.
From the year you turn 67, you get an extra basic deduction that lowers the tax on your pension payments.
When you want to start drawing your retirement pension you should contact the Swedish Pensions Agency and send in your application no later than three months before you want your first payment. Your insurance company(s) will automatically send you a pension application form to your home address a few months before you reach retirement age.
The Swedish Consumer Agency estimates that we are pensioners for approximately one-fifth of our lives. You can draw up a budget for your life as a pensioner on the Swedish Consumer Agency website. On the minPension website you can see your total pension and make calculations for different pension withdrawal rates.
It is possible to temporarily pause payments of your retirement pension and to restart payments later on. However, it is not possible to pause payments of your occupational pension and private pension insurance.
For the occupational pension and private pension, the shortest payment period is generally 5 years and payments may only start in the month after you turn 55. If payments end in the month you turn 65, the shortest period for your private pension payment is 3 years. The shortest payment period for VFF Pension’s occupational pensions is 5 years.
If you have insurance with repayment cover your beneficiaries will receive your money if you pass away before your entire pension has been paid to you. After payment has commenced, it is not possible to add or delete repayment protection. However, you may alter the sequence of your beneficiaries after payment has commenced. If you have a pension insurance without repayment cover it may be a good idea to draw this first, before you start drawing your pension insurance with repayment cover. If you do not have repayment protection, you get a higher pension.
Unemployment benefit is coordinated when you start drawing your retirement pension and occupational pension. This means that your unemployment benefit will be reduced by the amount that you receive in the form of your pension. However, there is no coordination with any private pension insurance you may have.
To be entitled to housing supplement, you must withdraw your entire public pension including the premium pension. It doesn’t matter if you rent or own your home.
On the Swedish Pensions Authority’s website, you can read more about housing supplement and elderly support and make calculations to see if you are entitled to housing supplement.
If you are thinking of moving abroad, bear in mind that you may lose any guaranteed pension you receive if the country you move to is outside the EU. If you do not have any significant connection to Sweden, taxation is 25 % or lower (under the rules for Special Income Tax on Non-Residents or SINK) if Sweden has an agreement with the country to which you want to move.
Contact any of our insurance administrators by calling +46 (0)31-66 12 10. Also contact your other insurance providers.
Swedish Pensions Agency website: www.pensionsmyndigheten.se
minPension website: www.minpension.se
Consumer Association website: www.konsumentverket.se/for-konsument/