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In 2000, the average life expectancy for men in Sweden was 77.4 years and for women 82 years, according to Statistics Sweden. In 2019, the most recent year for which Statistics Sweden has statistics, the corresponding ages were 81.3 and 84.7 years, respectively.
This has consequences for the pension. If we are going to retire no later than age 65, as the surveys that most people want show, it means that the pension will be sufficient for more months and years of life than before.
The result will be that either future pensioners will have to adjust to receiving a lower monthly pension compared to previous generations, or pension contributions must increase.
Or, which is the path that Swedish politicians have chosen, we will be forced to work later in life.
A couple of years ago, the Swedish Pension Agency commissioned the government with a proposal for so-called target ages. This is the age at which a certain age group must work to receive a pension corresponding to 70-80 percent of the last salary. In other words, it is an age that creeps up in line with life expectancy.
But what if even future retirees want to stop working before the target age? Skandia has tried to calculate this in a report where they took four occupational groups from three different generations and calculated the cost, which is significant. Skandia has assumed that people want 80 percent of final salary in pension.
For one person Born in the 1970s and who wants to retire three years before retirement age, this is about 19 percent lower pension than if you were working until retirement age. For a civil engineer, it is 20 percent lower.
In crowns, this means between SEK 6,200 and SEK 10,400 less in pension, per month.
If the same person is satisfied with retiring two years before their target age, the pension level will be 13 percent lower, or between 4,200 and 8,150 SEK per month.
Sums vary for the corresponding groups born in the eighties and nineties, respectively, but in percentage terms the reduction will be approximately the same.
The contrast becomes even greater when you study what happens to people of the same type if they choose to work two more years after the age of drawing. Skandia has assumed that the person works 75 percent in the first year and part-time the following year.
In these cases, the pension will be between 15% and 16% higher per month, compared to if they retired at the target age.
Mattias Munter, The Skandia pension economist and the author of the report believe, however, that it is not a given that everyone can work later in life.
– Working longer is always an alternative in theory, but in practice you don’t know what the job market is like then. Will I be able, strong, to continue working? He wonders.
Instead, according to Munter, people in their 30s and 40s should also save for their pension.
But there are other ways, for example, to reduce your expenses by repaying mortgages.
– A well-functioning personal economy includes repayments. But the prospects for future generations of retirees to be debt free are gone. They will have completely different housing costs compared to today’s retirees, Munter says.
– To have a more fluid income and the transition between work and pension, I think we will need, he adds.
In the pension debate From time to time there has been a request to increase the provisions for the pension system, due to the longer life expectancy. It would be a way of ensuring that future pensions reach the expected levels of future retirees.
But Munter hesitates here too.
– There are several that are in it and it is possible, but how should it be financed? Where are we going to get the money from, he wonders.
The political line It is quite clear, however, we will work later in life.
Some have already been implemented: the age at which you can claim your general pension as a minimum has been raised from 61 to 62 and will rise to 63 in 2023.
The so-called load limit, the age at which the Employment Protection Act expires, was raised to 68 last year and will rise to 69 in 2023.
Note: DN has asked the Swedish Pension Agency to review Skandia’s calculations. The authority has found them reasonable.
Read more: Save thousands by retiring on time
Read more: How to increase the retirement age in the coming years
