A recent study conducted by Länsförsäkringar has shed light on the best financial advice for retirees, based on their own experiences. Half of the surveyed retirees would advise their younger selves to save more and “live within their means.” 51% recommend saving more for retirement, while 50% suggest building up a financial buffer.
When divided between men and women, the advice is largely similar but with slight differences. 54% of men advised to “avoid unnecessary debt and live within my means,” while the corresponding figure among women was 41%. The overall percentage stood at 48%.
The study also provides a snapshot of how retirees perceive their current financial situation. Among those who saved privately for retirement, 29% feel that their finances turned out worse than expected. For those who did not save privately, the corresponding figure is 40%.
“Savings make a significant difference in the long run. Someone who saves 100 SEK per month from the age of 25 to 70, with an average annual return of 7%, will have around 353,000 SEK at retirement. This is a substantial addition to the pension that can make retirement life a bit easier to live,” says Stefan Westerberg, a financial expert at Länsförsäkringar.
“Important to think 50/50 during the early parenting years”
Significantly more women advise their younger selves to be financially compensated for factors that may have hindered them from achieving financial freedom. This includes factors like caring for sick children, parental leave, and part-time work. Among men, the percentage is 3%, while among women, it is 16%. These numbers reflect the gender inequality in family life, according to Stefan Westerberg.
“The results reflect today’s economic inequality where women take on greater responsibility for children, which has significant implications for personal finances and retirement. It is important to think 50/50 within the household, especially during the early parenting years,” says Stefan Westerberg, emphasizing that any inequality should be financially compensated.
“If someone takes on more responsibility for the children and works less, they should also be compensated for it. The compensation should cover the loss of income, pension, and private pension savings. Ultimately, it is about both parties being able to achieve financial security regardless of what happens in the relationship and in life,” he concludes.