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Pension hacks: How to make the most of your time in Sweden

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If you're working and paying tax in Sweden, you're probably entitled to a pension. Here's what you need to know. Photo: Fredrik Sandberg/TT
12:36 CET+01:00
In the excitement of getting stuck into life in a new country and tackling all the challenges that presents, it's easy for pensions to slip down the list of things to keep track of. This is especially true if you don't plan to stay in Sweden long-term. But don't let it fall off the radar, follow The Local's guide to manage and maximize your Swedish pension, even if you don't intend to stay here permanently.


The Swedish pension is part of the country's social insurance system, and it can seem like a confusing beast at times. The good news is that if you're living and working here, you'll almost certainly be earning towards a pension, and you'll be able to get that money even if you move elsewhere before retirement.

Exactly how much money goes into your pension pot depends on many factors, including your salary, length of time working in Sweden, your company's policy, and your own personal decisions (especially if you're self-employed).

Those who spend only a few years working in Sweden will earn a much smaller pension than people who work here for their whole lives, but that money could come in very useful once you retire, so it's important to know what you'll be entitled to.

The easiest way to understand how the Swedish pension works is breaking it down into three parts. There are three different sources for the Swedish pension: the state, your employer, and yourself.

If you've worked and paid tax in Sweden, you should be entitled to a Swedish pension. Photo: Simon Paulin/imagebank.sweden.se

First, there's the state pension (allmän pension), which comes from money paid in tax, and makes up the biggest part of most people's total pensions. It falls under the remit of the Pensionsmyndigheten or the Swedish Pensions Agency, a government authority dedicated to, you guessed it, pensions.

Absolutely everyone who has worked and paid tax in Sweden is entitled to this pension, and it's split into two parts: an income pension and a premium pension.

The income pension (inkomstpension) makes up the bulk of this. Each year, 16 percent of your income is paid into this pension. In this context, 'income' includes wages as well as all other taxable benefits such as paid sickness or parental leave, and unemployment benefits.

It's the employer who pays this, as part of the fees associated with employment, so you won't see it deducted from your salary and there's nothing that you as an employee need to do. The higher your salary, the higher the income pension will be, although once you reach the upper limit on pensionable income, your state pension won't increase any further. This upper ceiling is 43,309 kronor per month for the income year 2019, though this amount is regularly adjusted.

Keep track of your Swedish pension to be prepared for retirement. Photo: Henrik Montgomery/TT

On top of the income pension, a further 2.5 percent of your income goes into investment funds (the premium pension or 'premiepension'). Again, this is paid by the employer, but if you want to, you can choose which funds your money goes into. If you do not make a choice, your money will be invested in AP7 Såfa, the Seventh AP Fund (National Generation Management Option) which is the default option.

If you do want to move your funds, this can be done as often as you want, for free, by logging into the Swedish Pensions Agency's website using BankID. You can have up to five funds at the same time, and there is a list of all the available funds on the website, which also offers advice on factors to bear in mind when selecting which ones to put your money in.

However, bear in mind that the premium pension is only equivalent to 2.5 percent of your income, so if you're feeling overwhelmed, it's more beneficial to focus on maximizing your occupational and private pensions than the premium.

Those who live on a low income or no income while in Sweden may also be entitled to a so-called 'guarantee pension' (garantipension) once you retire, which ensures you get a basic minimum pension regardless of your salary status while working. 

This is the one component of the pension which you may not have access to if you later move abroad; you will only keep it if you move to an EU/EEA country, Switzerland, or certain parts of Canada. It is also calculated on the assumption that you lived in Sweden for at least 40 years (though there are special rules for those who arrived in the country as refugees), so if you live in Sweden for less than that, you'll receive a smaller proportion. The guarantee pension can be collected from the age of 65, but that age is could rise over the next few years under a new government proposal (this also applies to the age from which you can collect other kinds of pension).

Overall then, the amount you receive as state pension is impossible to calculate in advance, and will depend on: your salary, which other benefits you receive, how long you work in Sweden, and when you start drawing your pension. For context, the average general pension in 2016 was 11,791 kronor before taxes per month, and made up roughly two thirds of the average person's entire pension, but if you spend a large part of your working life in a country other than Sweden, that amount will be smaller.

Photo: Susanne Walström/imagebank.sweden.se

After the state pension, the second potential component of the Swedish pension comes from your employer and is known as the 'occupational pension' (tjänstepension). This will typically make up between 20 and 30 percent of your Swedish pension, but for high earners may be considerably more.

Most employees (90 percent, according to figures from the Swedish government) are entitled to some form of occupational pension, but exactly what this includes varies from workplace to workplace. Make sure to speak to someone from your workplace or trade union, if applicable, to ensure you understand what you're getting. Be aware also that some companies have a lower age limit at which they start paying occupational pensions, or may pay different amounts for employees of different ages. 

In many workplaces, pension arrangements are decided based on agreements between unions and employers known as 'collective agreements' (kollektivavtal). There are four main occupational agreements in Sweden, so find out which, if any, your workplace belongs to. 

If you have a collective agreement, the usual situation is that 4.5 percent of your salary up to a monthly income of 40,250 (in 2019) will be paid into your occupational pension. In some cases, the employee has the option to choose which funds their pension is invested in, so you may be able to move your funds around, as with the premium pension.

It's a good idea to find out about occupational pension plans when you negotiate your job contract, as this can be one of the biggest employee benefits. Photo: Tim Gouw/Pexels

In some sectors, there are no collective agreements, and in that case it's up to the employee to negotiate an occupational pension with their employer – which they are not obliged to offer. 

If you're self-employed in Sweden, or don't have an occupational pension, you may choose to make individual contributions to compensate. As a rough guide, it's a good idea to save around 4-5 percent of your monthly salary. And if you run your own business, you can make your own contributions towards an occupational pension, called owner's contributions.

The third source of pension money is a private pension (privat pension), which you can set up if you want to put some of your own money towards retirement. There are various ways to do this: a private pension fund through a bank; a capital insurance fund (kapitalförsäkring); or by investing in stocks, property, or other assets. If you're not planning to stay in Sweden long-term, it may well make sense to keep these savings in another country, if possible.

So, how do you keep track of these different funds? In Sweden this is actually really easy.

The orange envelope – you can't miss it. Photo: Maja Suslin/Scanpix/TT

Each spring, you'll receive a bright orange envelope from the Swedish Pensions Agency, which provides a breakdown of how much you've saved for your state pension so far, as well as a forecast of how much you'll be able to withdraw when you retire, based on current data. Plenty of Swedes dread or ignore the arrival of the envelope, but it's useful to familiarize yourself with the information. You can also check the status of your state pension at any time by logging onto the 'Mina Sidor' (My pages) section of the Swedish Pensions Agency's website.

Be aware though that this is only a rough estimate, and the further from retirement you are, the less accurate it is, since the factors that determine pension amounts change regularly. It's also calculated on the assumption that you'll live and work in Sweden for at least 40 years, meaning the estimates are generally much higher than the real amount many expats will receive.

If you want to review all three parts of your pension – state, occupational, and private – you can check this online at Minpension.se, a website run by the Swedish government and pension companies. This is also helpful if you're unsure whether your previous employers in Sweden had occupational pensions. Be aware that a small proportion of pensions won't be visible through the website, but according to the site, 90 percent of people should be able to see their full pension.

If you've been neglecting your pension, you can find out how much you've saved in just a few clicks. Photo: Burst/Pexels

Knowing that the money's there is all well and good, but many expats will wonder what they need to do now to ensure they actually get it when the time comes.

You can choose to start taking your Swedish pension at any time after the age of 61, although the government has proposed raising that age to 62. You can draw 25, 50, 75, or 100 percent of your pension each month, so if you choose to continue working but reduce your hours, for example, you might opt to take out a smaller amount.

Those who retire outside Sweden, or leave the country long before retirement, are still entitled to any pension earned while working in Sweden (apart from the guarantee pension, as mentioned above). You do not have to have Swedish citizenship in order to claim it, but you do have to actively apply for the pension. This is because it's up to you when you start receiving it.

When you leave Sweden, contact the Swedish Pensions Agency to inform them of your new address so that you will continue to receive statements and notifications. Make sure to keep them updated each time you change address.

If you retire in the EU/EEA, or another country with which Sweden has a pension agreement (you can find a full list here, which includes the US and Canada), you just need to apply to the pension authority in your country of residence in order to start drawing your Swedish pension. If you live in a different country, you should contact the Swedish Pensions Agency for advice on accessing your pension, which is done by filling out this form.

Photo: Henrik Holmberg/TT

The agency recommends beginning the application process at least three months before you plan to take the pension, and ideally six months beforehand if you live abroad. It's possible to have the pension paid into either a Swedish bank account or an account outside Sweden.

Once you start withdrawing the Swedish pension abroad, you may also be sent a life certificate (levnadsintyg) each year. These are sent to pensioners in countries from which Sweden's Pensions Agency and Social Insurance Agency don't receive information automatically, to confirm that the recipient is still alive. The countries which do exchange information with Sweden automatically are: Denmark, Norway, Finland and Germany.

Life certificates are sent out to those receiving Swedish pensions each autumn, and can also be downloaded from the Pensions Agency's website. They must then be approved by an authority such as local police, social insurance, or Swedish embassy, and returned to the Pensions Agency by post or e-mail.

In summary, here's your checklist to make sure you're on track for a healthy Swedish pension:

  • Get online to check how much you've accumulated so far
  • Speak to your employer about your occupational pension, and find out if there are any decisions you can make relating to it
  • If you're self-employed or don't have an occupational pension, consider setting up private savings to compensate
  • Decide if you want to change the funds your premium pension and (if applicable) occupational pension are invested in
  • Think about whether you want to set up additional private pension savings
  • Keep the Swedish Pensions Agency informed about your address if you leave the country
  • Get in touch with the Swedish Pensions Agency (or, in the EU/EEA, your local pensions authority) six months before you hope to draw the pension

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Peter Steinmetz - 06 Feb 2019 09:25
Great article. Very helpful. Tack så mycket!
Emma Löfgren, Editor, The Local Sweden - 06 Feb 2019 13:10
Good to know it was helpful! Thanks for letting us know, Peter!
Enrico - 16 Feb 2019 06:21
Great read! Thanks for the information!
- 18 Feb 2019 21:43
Excellent article, and very explanatory. Thanks!!
Juan P. Contreras - 20 Feb 2019 18:31
Very good article... hopefully you will publish more guides of this sort... for example how to manage housing contracts (it might be there already... but it would be good if there is a page menu focused specifically on guides and FAQs)
Raj - 04 Mar 2019 11:52
Thank you. It explains the basics clearly. Keep going :-)
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