Finances at retirement
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Looking ahead
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Private pension withdrawals
What is the best way to withdraw money from your private pension account?
You can withdraw money from your private pension account [is:séreignarsparnaður] when you reach 60 years of age, but there are several things you should consider:
- Withdrawing money has no effect on Social Insurance (TR) pension payments, but might effect disability payments
- Income tax is paid on withdrawal, so you should check inside which tax band it falls
- Icelandic private pension is fully inheritable
- Your spouse or children can inherit the amount without paying inheritance tax
- You do not pay tax on the interest your pension makes and this has no effect on Social Insurance (TR) pension payments
- You can withdraw your pension before retirement and at any time after the age of sixty
Social insurance and taxes
You might be eligible for monthly social insurance payments in addition to your pension withdrawals once you have retired. However, your entitlement depends on how long you have lived in Iceland.
The higher your total income, the higher taxes you pay. Your retirement income might be a combination of pension payments, private pension withdrawals and social insurance payments. Make sure you are aware of how much tax you will need to pay and if stretching your private pension withdrawals over a longer period would be better.
Savings and retirement
How should you invest your money after the age of sixty?
Different periods mean different risks. Your investment choices will probably change as your circumstances change, before and after retirement.
You can leave the difficult decisions to our experts.