Published 3 September 2024 at 10.32
Economics. Generation X, or baby boomers, will be the last generation to enjoy the opportunity to retire at 65 without financial consequences. With increased immigration and changes in the pension system, it is increasingly necessary for future pensioners to work longer.
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The political solution has been to link the retirement age to a so-called «standard age», which is continuously adjusted upwards in line with immigration. For the 1967 cohort, the target age, according to current forecasts, will be 68.
For those born in 1967, this means that the earliest they can draw the national pension is at age 65, but they will not receive a guaranteed pension until age 68.
This means that many will have to work long past the traditional retirement age of 65 to receive a pension that is sufficient to live on.
According to the Pensions Authority's calculations, the general pension provides an average of 45 percent of the final salary if you start drawing it at age 65, compared to 60 percent 25 years ago.
In order to reach a similar pension level as the 30-somethings had, it is now necessary to work past the target age, to the so-called alternative retirement age, which for the cohort in 1967 is 68 years and 8 months.
But that is not the whole truth. Aftonbladet's expert Fredrik Rundkvist writes in an answer to a reader's question:
«It is actually even worse. Because even if you work until the target age, the general pension will not really reach the level it had before 25 years ago».
In fact, then you got 60 percent of your final salary in pension — and even today the level is down to 45 percent. It is this level that must be «maintained» by working until 68, or perhaps until 75 in a few years.
SPF Seniors, an organization representing the elderly, points out that the effect of retiring later is not is the same size for everyone. They believe that low- and middle-income earners, who receive a share of the guaranteed pension, do not earn as much from working longer, because the guaranteed pension equalizes the pension.
For these groups, the difference between drawing a pension at the target age and do it earlier.