How Swedes want to take their pensions

Four out of ten 65-year-olds use the Withdrawal Planner service on the Swedish pension webpage “minPension” to plan their pension. People with higher education and income are more likely to use the tool and most opt out of having their occupational pension paid out for life. This is according to a new report from researchers at Jönköping International Business School (JIBS) at Jönköping University.

The Withdrawal Planner service was launched five years ago as support for those who want to plan their pension withdrawals. Among other things, users can test different ways of withdrawing their pensions and see their pension over time, both before and after tax.

Johannes Hagen and Andrea Schneider are Associate Professors in Economics at JIBS and have studied the use of the Withdrawal Planner. The analysis is based on individual data from “minPension” and Statistics Sweden on people over 55.

As many as nine out of ten 66-year-olds have logged on to “minPension” at some point. Four out of ten have used the Withdrawal Planner service.

“Withdrawing your pension in a good way is no easy task. This is where digital planning tools such as the Withdrawal Planner fulfil are incredibly important functions,” says Johannes Hagen.

More users among high-income earners

The analysis also shows that the proportion of users of the service is higher among groups with higher education and income than those with low education and income. It also shows that many log in once and never return.

“This type of service needs to be designed in a way that makes it user-friendly, even for those with no prior knowledge,” continues Johannes Hagen.

The report shows that only four out of ten plan to receive their occupational pension for life. One in five occupational pensions is planned to be drawn over five years and about the same number over ten years.

“Many people choose short withdrawal periods for good reasons, but it is worrying that most pensioners are opting out of the financial security that lifelong withdrawals provide in case they live longer than expected,” says Johannes Hagen.

Users of the Withdrawal Planner can also get a checklist so they know what to do and who to contact to start drawing their pensions. It is also possible to apply for pensions from the Swedish Pensions Agency, Labour Market Insurance and a paid-up policy from the National Government Employee Pensions Board.

“The withdrawal planner is already a popular service for pension planning. Through insights from the research report, we have identified important areas for development. We need to further develop and improve the functionality in close co-operation with all actors that supply data to “minPension.” By building on the existing service, we create even better opportunities for our users and our affiliates‘customers to easily plan and apply for their pension withdrawals,” says Cecilia Rosendahl Lavén, CEO of “minPension.”

The analysis also shows that the use of the Withdrawal Planner on “minPension” is linked to longer working lives and later withdrawal ages.

“Our report provides unique insights into how today's older people plan for their pension. We also gain new knowledge about which groups are more or less likely to use digital pension tools like the Retirement Planner. We hope that minPension’s services can help more people make informed decisions that they are happy with in the long run,” says Johannes Hagen.