The short answer is yes. After all, better late than never.
Even if retirement is starting to appear on the horizon, the savings you put aside now can still make a meaningful difference to your income later on.
Some of your best years may still be ahead of you. And who knows, your savings could even help you make a long-held dream come true.
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Employer contribution
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Is it too late to get a coffee right now?
On a dark Thursday afternoon, half past four during the final months of the year, a middle-aged man stands by the coffee machine and asks himself this pressing question — borrowed from the song of the same name by the beloved Icelandic musician, his late highness Prince Polo. But what about supplementary pension savings — is it too late for me to start now?
If you contribute 2–4% of your salary to supplementary pension savings, your employer will add a 2% matching contribution.
You can make tax-free supplementary pension savings payments toward your mortgage. If you're purchasing real estate, you have the option to use your supplementary pension savings to make the purchase easier.
If you pass away, the full balance of your supplementary pension savings goes to your heirs. They are not subject to inheritance tax on pension savings; instead, the payout is taxed under income tax laws.
No income tax is paid upon deposit but rather upon withdrawal, no capital gains tax on returns, and no inheritance tax on balances upon death. The savings are not subject to seizure in case of bankruptcy.
Arion bank’s supplementary pension savings give you access to diverse investment options that match different ages and risk profiles.
When people retire, their income often decreases. Therefore, it's a smart idea to use supplementary pension savings to increase income during retirement age. You could even stop working earlier.
Get a complete overview of your pension savings in the Arion app. If you do not already have additional pension savings with Arion Bank, you can start saving in just a few taps.
The Icelandic pension system can be complex. Nevertheless, we encourage people to roll up their sleeves and take the time to understand their pension matters, as this kind of preparation can make a significant difference to the options available when retiring.
Supplementary pension savings is a type of private pension savings. It is a form of savings that allows an employee to allocate up to 4% of their total salary to additional pension savings, with the employer contributing a 2% matching contribution.
Saving is important to achieve financial security and have flexibility to meet unexpected expenses. We have compiled some good advice to keep in mind when it comes to saving.
In our Pension Book, Arnaldur Loftsson, CEO of Frjálsi Pension Fund, discusses mandatory membership in pension funds. Not everyone is free to choose their pension fund, but those who can should make their selection carefully as the structure of funds varies. Therefore, the pension of people with the same salary throughout their career can differ, and additionally, some funds like Frjálsi offer the option to direct part of the mandatory pension savings into private pension accounts that can be inherited.
A shorter version of the article can be read below.
Last spring, Arion Bank published the Pension Book. In it, Hjörleifur Arnar Waagfjörð, Head of Institutional Asset Management at Arion, discusses asset management for pension funds. Those who manage pension fund assets carry a significant responsibility and must always protect the interests of their clients regardless of other interests, including their own.
The full article can be read below.
Buying your first home is an exciting milestone, but the process can be complex and challenging. As purchasing a property is one of the biggest financial decisions you will make, it’s essential to start saving early. Building up enough equity for a deposit takes time, but with good planning and the right tools, you can speed up the process.
The unequal status of cohabitants regarding pension rights has been somewhat in discussion. Pension fund laws include an equalization measure that allows for the division of retirement benefits or pension payments between spouses or cohabitants through voluntary agreements. However, there are many factors to consider when examining whether splitting retirement benefits is suitable, and it cannot be claimed that this approach is always the right one in every situation.
If a decision is made to split pension rights, the division only applies to the retirement benefits of those who are or have been in marriage or unmarried cohabitation, and to rights that have accrued during that time. The division must be mutual, equal, and cover all pension funds in which the member and spouse have rights. Legal requirements regarding health and age apply to the division of accrued rights, so this option needs to be considered in a timely manner.
Everyone between the ages of 16 and 70 who is employed in Iceland is legally required to contribute to a pension fund. By paying into a pension fund, we are guaranteed lifelong retirement income, as well as pension benefits in the event of unforeseen circumstances, such as disability, spousal, or child pensions.
Depending on the profession, some workers are required to pay into a specific pension fund, while others have the freedom to choose a pension fund for their mandatory pension contributions.
