Pension Calculator

Estimate your pension income and see how much you should save to maintain your desired standard of living in retirement.

Your Information

Savings and Returns

Historical return on equity funds: 6-8%. Bonds: 3-4%.

The proportion of current income you aim to replace in retirement.

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The Norwegian Pension System

The Norwegian pension system consists of three main pillars:

1. State Pension (Public)

This is the basic pension everyone in Norway is entitled to, funded through taxes. Since 2011, it is calculated based on:

  • Pension Accrual: 18.1% of pensionable income up to 7.1G*
  • Flexible Retirement Age: From 62 to 75 years
  • Life Expectancy Adjustment: Pension is adjusted according to expected lifespan
  • Indexing: Annual adjustment based on wages and prices

*G = basic amount in the Norwegian National Insurance, adjusted annually (2024: ~£11,860)

2. Occupational Pension (Mandatory)

All Norwegian employers must provide occupational pensions for employees. Two main types exist:

  • Contribution Pension: Employer contributes at least 2% of salary between 1G and 12G annually
  • Defined Benefit Pension: Guaranteed pension based on final salary and service years (common in public sector)

3. Private Pension Savings (Voluntary)

To supplement the first two pillars, you can save privately through:

  • Individual Pension Savings (IPS): Tax benefit on contributions up to £1,500/year
  • Equity Savings Account: Deferred tax on gains and dividends
  • Funds and Stocks: Long-term saving without pension restrictions
  • Property: Paid-off housing reduces expenses as a retiree

How Much Do You Need in Retirement?

Guidelines for pension needs:

  • Basic: 60-70% of final salary before tax
  • Comfortable: 70-80% of final salary before tax
  • Maintain Standard of Living: 80-100% of final salary before tax

Note as a retiree:

  • Pay lower taxes (special deductions for retirees)
  • No pension contributions (saves ~2% of salary)
  • Often have lower expenses (paid-off mortgage, no child expenses)

The 4% Rule

Our calculator uses the 4% rule to estimate required pension capital. This rule suggests you can withdraw 4% of your capital annually without depleting it over a 30-year retirement period.

Required Capital = Desired Annual Pension / 0.04

Example: If you want £30,000/year, you need £750,000 in capital.

Compound Interest and Long-Term Savings

Starting early has a huge effect due to compound interest. Example:

Start at 25 years old

  • Monthly Savings: £300
  • Savings Period: 42 years (until 67)
  • Return: 6% per year
  • Total Capital at 67: ~£640,000
  • Contributed: £150,000
  • Return: £490,000

Start at 40 years old

  • Monthly Savings: £300
  • Savings Period: 27 years (until 67)
  • Return: 6% per year
  • Total Capital at 67: ~£250,000
  • Contributed: £97,200
  • Return: £153,000

Conclusion: Starting 15 years earlier gives you 2.5× more capital, even though you only contribute 50% more in total.

Tips for Good Pension Saving

  • Start early: Compound interest is your best friend
  • Save regularly: Automatic monthly contributions
  • Long-term horizon: Tolerate market fluctuations
  • Diversify: Spread risk across asset classes
  • Keep costs low: Choose low-cost index funds
  • Increase savings: Raise contributions as your salary grows
  • Check your state pension: Log in at nav.no for your accrual