What Sweden’s new retirement age means for you

Sweden has decided to raise the retirement age following a broad cross-party agreement. Here's how long you may have to work under the new plan.

What Sweden's new retirement age means for you
Sweden will raise its earliest retirement age to 64. Photo: Claudio Bresciani/TT

Sweden said it would raise the earliest retirement age from 61 to 64 in order to secure future pensions.

“We are reforming the Swedish pension system in order to raise pensions and increase security for both today's and future pensioner,” Social Affairs Minister Annika Strandhäll and Financial Markets Minister Per Bolund said in a statement.

“As we are living longer, we have to work longer if pensions are going to continue to grow. This agreement is an important step toward a longer working life and thereby higher pensions and more resources for the welfare state,” representatives of the four centre-right opposition parties said in the same statement.

The increase in the retirement age will be carried out in stages, and completed in 2026.

Under the current system, people working in Sweden can legally retire at the age of 61, though for financial reasons most choose to work longer. The average retirement age is 64.5 years, according to official statistics.

With the reformed system, you will have the right to work until the age of 69, compared to 67 under the current system. If you and your employer both agree, you can however work longer.

Pensions in Sweden vary widely depending on the age a person retires. Levels are often determined by the collective wage agreements negotiated between employers and unions.

The pension system has three components: a pension paid by the state based on an employee's salary, a complementary pension paid by the employer, and, optionally, private pension savings.

The proposal presented on Thursday was put together by a cross-party group of the ruling centre-left coalition government as well as the four parties in the centre-right Alliance opposition.

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Reader question: When am I eligible for a Swedish pension?

A reader got in touch to ask how long he had to work in Sweden before he was eligible for a pension. Here are Sweden's pension rules, and how you can get your pension when the time comes.

Reader question: When am I eligible for a Swedish pension?

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.

You will start earning your Swedish general pension, or allmän pension, once you’ve earned over 20,431 kronor in a single year, and – for almost all kinds of pension in Sweden – there is no time limit on how long you must have lived in Sweden before you are eligible.

The exception is the minimum guarantee pension, or garantipension, which you can receive whether you’ve worked or not. To be eligible at all for this, you need to have lived in Sweden for a period of at least three years before you are 65 years old. 

“There’s a limit, but it’s a money limit,” Johan Andersson, press secretary at the Swedish Pension Agency told The Local about the general pension. “When you reach the point that you start paying tax, you start paying into your pension.”

“But you have to apply for your pension, make sure you get in touch with us when you want to start receiving it,” he said.

Here’s our in-depth guide on how you can maximise your Swedish pension, even if you’re only planning on staying in Sweden short-term.

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 they are still entitled to something – people who have worked in Sweden will keep their income pension, premium pension, supplementary pension and occupational pension that they have earned in Sweden, even if they move to another country. The pension is paid no matter where in the world you live, but must be applied for – it is not automatically paid out at retirement age.

If you retire in the EU/EEA, or another country with which Sweden has a pension agreement, 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 a form (look for the form called Ansök om allmän pension – om du är bosatt utanför Sverige).

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.

A guarantee pension – for those who live on a low income or no income while in Sweden – can be paid to those living in Sweden, an EU/EEA country, Switzerland or, in some cases, Canada. This is the only Swedish pension which is affected by how long you’ve lived in Sweden – you can only receive it if you’ve lived in the country for at least three years before the age of 65.

“The guarantee pension is residence based,” Andersson said. “But it’s lower if you haven’t lived in Sweden for at least 40 years. You are eligible for it after living in Sweden for only three years, but it won’t be that much.”