Combining work and retirement is growing trend

An increasing number of pensioners in Sweden are so-called "jobbonärer" which means they combine working and claiming their pension. According to a recent report written by Ivar Wahlstein, research assistant at Jönköping International Business School (JIBS), Jönköping University on behalf of myPension, one in three 60-plus people in Sweden today is a jobbonär or plans to be. And the trend looks set to grow stronger.

The survey shows that the reasons for choosing a ‘jobbonär’ life vary. For many, the urge to feel needed plays a key role. For others, the concern is that their pension will not be enough. But it could also be about not having the energy to work full-time in the last few years leading up to retirement. The ‘jobbonär’ solution can then be a workable alternative. Although the reasons vary, the pattern seems to be the same for the entire population.

"When we examined the interest in combining work and withdrawing pension, we saw no clear correlation with income or education. It is thus interesting how the actual outcome in the population differs from the interest shown by the survey responses. This could be because individuals choose differently when it is time for them to retire, or that the composition of those who are ‘jobbonärer’ may be changing,” says Ivar Wahlstein.

The report is based on a survey that is part of the multi-year research project "Digitalization of Pension Claiming in Sweden". The project studies Swedish pensioners' pension decisions with data from minPension and Statistics Sweden. It is run by the researcher duo Johannes Hagen and Andrea Schneider at JIBS, in collaboration with minPension and with funding from the Kamprad Family Foundation.

"Labor income plays an increasingly important role in the overall disposable income of pensioners. The development is mainly driven by high-income earners and people with post-secondary education. As earlier studies have shown, the increased income inequality among pensioners can be largely attributed to increased income from work (and occupational pensions)," says Johannes Hagen.

Connected to increased life expectancy

Today, more than 416,000 people in the 65-plus age bracket work, often in combination with pension withdrawals. Among middle-income earners, a good four out of ten 67-year-olds still have income from work. At the age of 70, more than 8,000 women (13 per cent) and 13,000 men (25 per cent) are in gainful employment, and at the age of 80, 5 per cent of women and 12 per cent of men are still in gainful employment. Most retirees work part-time.

Most indications are that the trend towards a later exit from working life will continue. The average life expectancy in Sweden is increasing. Therefore, most people need to work longer to get the same level of pension income as the older generation.

"Since the introduction of the public pension, life expectancy has increased while the average retirement age has remained essentially constant. For these reasons, the pension system's retirement age has been raised and will continue to do so. Therefore, it is still to be seen whether the proportion of people who combine pension withdrawals with work will also increase,” concludes Johannes.