The importance of pension savings

When I talk to those around me, they often have little understanding of their own pension. I usually ask them the question: when you think about the future, what do you envision?
For most people, the dream of a worry-free retirement involves time to explore new hobbies, travel, and enjoy life. But to realize these dreams, it’s essential to plan financially—and it starts with pension savings.

To achieve this, it’s important to be aware of pension accrual and start your own savings. Few people know how crucial that part is. Pension savings in Norway are primarily divided into three parts:

• The National Insurance Scheme: Forms the foundation of the pension system in Norway and is calculated based on your total income throughout your working life.

• Occupational Pension: This is the pension that your employer pays on your behalf. The Mandatory Occupational Pension Act ensures that all employees have this benefit.

• Private Pension Savings: To fill any gaps in your pension, you can choose to save in a private pension scheme.

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I talk more about this in the pension course in the app! There, I'll teach you a lot of useful information if you want to get familiar with your pension—something I recommend to everyone. Small changes can result in several million in pension accrual!

The case is—the earlier you start saving, the better your chances are for a financially stable retirement, thanks to the power of compound interest.For example, a monthly deposit of 1,000 kroner can grow into a significant amount over 40 years with a return of 10.3%*. You would end up with nearly 7 million, of which 480,000 kroner is what you’ve contributed.

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How to Start with Personal Savings and Pension Savings

Starting is easier than you may think: 

1. Assess your financial situation: Review your current income, expenses, and existing savings plans.
2. Set a realistic goal: Determine how much money you want to have available when you retire. If you're not sure, that's okay—the key is to start saving, and you can refine this goal over time.
3. Choose the right savings method: Based on your financial situation and goals, choose between different savings options. A financial advisor can help you make informed decisions.
4. Automate your savings: Set up a monthly savings plan. You can easily do this in the app!‍
5. Review Current Pension Plans: Increase the stock portion of your pension savings and adjust it to suit your needs.

Ensuring financial freedom in retirement requires more than just relying on the National Insurance Scheme or your occupational pension. It’s important to remember that it’s your money, you are in control, and you should make an active and conscious choice. If you don’t make a choice, you let others choose for you (and that’s not advisable). 

Saving for your pension does not only provide financial security but also peace of mind. Start saving today; your future self will thank you. I can promise you that!

Do you want to learn more about pension and how you can ensure a more comfortable retirement? Then you should check out the pension course in the app!

Best regards,

Hege

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Feel free to email me if you have any questions: hege@stackx.me

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*Before tax, not adjusted for inflation. We assume a 10.3% annual return, which is what the Oslo Stock Exchange has averaged over the last 40 years according to Alfred Berg.

Note: Investing in financial instruments involves risk. Historical returns are not a guarantee of future positive returns, and there is a risk of negative returns. #advertisement

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