There is a useful website that provides information about your pension, called Minpension.se. It provides a prognosis of what you can expect to receive in pension when you retire.
Basic Pension
The basic pension, is divided into:
- Income pension
- Premium pension
- Guarantee pension
The Premium pension is the part that you can choose where to invest the money, e.g. in a stock fund or interest fund. If you don't make a choice, the money will be invested in AP7, the state's management alternative.
What's Most Important for a Good Pension?
The most important thing for a good pension is to have worked and paid taxes in Sweden. It's also important to have private pension savings to receive a larger benefit as a retiree. Previously, 30 years of working life was enough to get a good pension.
Guarantee Pension
The Guarantee pension is the pension paid to you if you have worked little or not at all in Sweden but are still entitled to a Swedish pension. You may be eligible for a guarantee pension if you have lived in Sweden for at least three years. To receive the full guarantee pension, you must have lived in Sweden for 40 years. The amount decreases gradually based on the number of years, so if you have lived in Sweden for 10 years, you will receive 10/40 of the guarantee pension.
Occupational Pension (Tjänstepension)
Having an occupational pension is a prerequisite for a good pension and can make up a large part of your pension when you retire. When you take a new job, it's always a good idea to ask if they offer an occupational pension (tjänstepension) and how much it is. 9 out of 10 employees have an occupational pension in Sweden, but not all employers offer one. If your workplace doesn't offer an occupational pension, consider starting your own private pension savings.
Private Pension Savings
There are good alternatives with reduced tax effects if you want to save privately for your pension. Among these, ISK Investment Savings Account (Investeringssparkonto) and Capital Insurance (Kapitalförsäkring) are popular options. Most banks and insurance companies offer services for private pension savings. NOTE: Be aware that for some funds and savings, the money is locked in until you retire. This is both an advantage and a disadvantage, as you can't withdraw the money prematurely, but at the same time, you're locking in money for your future pension.
