Private pension savings
Today, many people feel that they do not really know how pension savings work, even though it is something that affects us all. The questions are many: What are the parts of the pension? How do you actually save for retirement? What affects the size of the pension? Here we find out everything you need to know!
What is pension?
During working life you save money for the period of life when you are no longer working – your pension. The later you retire, the more money will be paid each month thereafter. The pension consists mainly of three parts; general pension, occupational pension and own pension savings. The size of the parts in relation to each other is different from person to person and depends, among other things, on how long you have worked, what kind of agreements you have with your employers and how you have chosen to manage your own pension savings.
General pension – the basis of your savings
The pension paid by the state is called a general pension and you receive it as long as you live. When you work, 18.5 percent of the tax you pay goes to the public pension so you have something to live for when you stop working. The general pension is thus based on your total income and consists mainly of two parts: income pension and premium pension. The income pension is a fixed part that you cannot influence once you have retired. It is also governed by the Swedish economy, so if Sweden’s economy develops strongly you will receive more pension. The other part, the premium pension, you can choose how it should be placed. To make your own choice, log in to the pension authority.
Occupational pension – agreed with your employer
Occupational pension means that your employer pays a monthly fee so that money is deposited into your pension. If you are employed by a company and have a collective agreement, occupational pension is always included, but other companies can pay occupational pension even though they do not have a collective agreement. There are different types of occupational pension agreements whose content determines exactly how much pension is paid to you each month. You can choose how your occupational pension should be placed, then you turn to the election center to which your occupational pension agreement belongs. Which it is your employer can inform about.
Own pension savings
Most people need their own pension savings. It becomes especially important if you do not have a retirement pension, work part-time for longer periods or if you have realized that your pension will not suffice for the lifestyle you want. Keep in mind that you will go a long way in depositing a smaller sum each month, in the long run the money will grow. Some examples of how you can save your pension yourself are to save through funds or pay off your loans. If you are saving through funds or other securities, it is important to choose the right level of risk; If your finances cannot withstand a downturn, you should primarily have interest-based funds, even though you cannot expect any major increase in value.
Take control of your pension
If you want to take control of your pension savings, it’s never too late to get started. On the website minpension.se you can log in and see how much you have saved for retirement so far. It gives you an overview of what your situation looks like and it becomes much easier to know what measures are needed to possibly improve the situation. Contact your employer and ask if you have an occupational pension. If you haven’t – start saving for yourself. A first step may be to contact the banks’ pension advisers.