Save extra for your retirement

Save extra for your retirement

 Extra pension payments can grow into a substantial amount because you give them the opportunity to increase in value – and even small amounts can make a difference.

It is therefore worth considering whether your finances allow you to boost your savings. You can do this in two ways – either by making a single payment or by paying an extra amount each month.

Do not miss out on Camilla’s useful pension tips 

What do you think DKK 500 a month could grow to over 34 years? Find out here as PFA’s private economist, Camilla Schjølin Poulsen, highlights the benefits and opportunities of saving as much as possible for your retirement. This includes starting early and remembering that even small amounts can make a difference.

The video also explains the two ways to boost your pension and provides useful advice on what you should pay particular attention to. Click on the video to learn more about:

  • The compound interest effect
  • Think of your pension as your future salary
  • Start saving as early as possible
 

In Danish only.   

Calculate the value of your expected savings

The power of compound interest can give your pension savings a real boost. Over time, your savings can grow in value as you earn returns on them. 

At PFA, you can make additional contributions in two ways: a larger one-off payment or as an extra monthly contribution.

Use the calculator below to see how much extra value this could create for you.

Two ways to boost your savings

  

 

Transfer a larger amount in one go

 

Transfer a smaller monthly amount

Would you like to make a single payment?

If you have money to spare, you can always put it to work in your pension savings.

It is simple, as all you need to do is transfer money from your personal account to your pension savings with PFA. This allows you to make full use of your tax deduction.
  

Benefits of making a single payment to your pension savings
Tax rules and pension go hand in hand. By making additional pension payments, you can achieve the following:

  • Possibility of reducing or completely avoiding having to pay top-bracket tax
  • The return on your pension savings is taxed at a lower rate than returns on other investments and bank deposits
  • More money to live on when you choose to retire
  • With a good payout plan, you will typically only have to pay bottom-bracket tax when your pension is paid out
 
Example

Morten is 38 years old and earns DKK 75,000 a month.

He is receiving a bonus of DKK 50,000, which would give him a net payout of approx. DKK 21,600 after tax right now.

Instead, he is considering paying the bonus into his pension savings, which are currently invested at high risk. This means that the money is expected to have grown to DKK 223,000 before tax by the time he turns 69.

 
Transfer a single payment via My PFA

Would you like to make an extra monthly payment?

Even if you make a small additional payment to your pension, it can grow into a significant amount of money over time. The compound interest effect works in your favour, allowing you to boost your savings without really noticing it.

We therefore recommend that you consider paying a little extra into your pension savings if your finances allow. Watch the video to see how little it takes to make a big difference.

A slightly lower salary can give you a much larger pension
To get an idea of how much the additional payments could affect your future finances, try the Pension Estimate.

Below, you can see two examples. Afterwards, you can experiment with your own figures on mitpfa.dk.

Go to the Pension Estimate and see if you are saving enough
 

Remember to turn on the sound and click CC to see English subtitles.   

Top-bracket tax offers an even greater advantage


Example 1: Top-bracket tax

Line is 35 years old and pays top-bracket tax. If she can spare DKK 500 a month, she can pay an additional DKK 1,125 into her pension savings each month in present value. This means that she is expected to have approximately DKK 1.4 million extra in her pension savings before tax by the time she turns 69.

However, if Line waits until she is 40 before making the payments, the amount will fall to DKK 990,000.


Example 2: Bottom-bracket tax

Laura is 35 years old and pays bottom-bracket tax. If she can spare DKK 500 a month, she can pay an additional DKK 900 into her pension savings each month in present value. This means that she is expected to have approximately DKK 1.1 million extra in her pension savings before tax by the time she turns 69.

However, if Laura waits until she is 40 before making the payments, the amount will fall to DKK 790,000. 

Find an estimate that suits you

Future value in DKK
IMonthly payment of DKK 500 You pay bottom-bracket tax You pay top-bracket tax
From age X to 69 Final deposit before tax Final deposit before tax
Age 25 DKK 1,925,000 DKK 2,538,000
Age 30 DKK 1,444,000 DKK 1,903,000
Age 35 DKK 1,067,000 DKK 1,407,000
Age 40 DKK 773,000 DKK 1,020,000
Age 45 DKK 546,000 DKK 719,000
Age 50 DKK 370,000 DKK 488,000
Age 55 DKK 236,000 DKK 311,000
Age 60  DKK 134,000 DKK 176,000
Age 65  DKK 57,000

DKK  75,000

We have made it easy for you

If you would like to increase your pension payments, please contact your HR or payroll department.

We have made this easy for you by preparing an email template in which you simply need to enter an email address and the percentage by which you would like to increase your payments.

Increase your pension payments