One of the most common mistakes regarding pensions is that one is wrong about the risk. Young people generally have too little risk and older people generally carry too much risk. A mistake that can cost many thousands in retirement. That is the theme of this week's episode, which also introduces the concept of risk reduction (eng: glidepath) and Lysa's new solution for pension savings. For the sake of transparency: This week's episode is in collaboration with and advertising for LYSA because we interview Patrik Adamson who is the CEO. Since 2019, we have also had the majority of our savings with LYSA. One way to describe long-term smart and convenient saving is that it is like driving a car. It is something that at times requires pressure on the gas to get ahead and sometimes you need to brake in order not to take unnecessary risks and crash into the ditch. The equivalent in savings is that stock index funds are the gas that accounts for the increase in value and growth. Bond funds are the brake that ensures that you keep what you have earned from the shares. Both are needed for the ride to be comfortable. But you need to know when to accelerate and when to brake. A big insight for me came a couple of years ago when @JFB in the community did a compilation of how the different pension companies set the proportion of gas and brake depending on one's age. It differed a lot - everything from some who farmed fish to others who drove with a type of turbo. The car journey becomes even worse if you e.g. want to retire at a different age than the target age. Say you want to go a couple of years earlier, then the supplier will accelerate when you should really slow down. Or vice versa. The basic rule is that when you are young, you often have the opportunity to bear a lot of risk. You have a long time to spare and time works in your favor and you don't need the money in the near term. A bad year does not affect significantly. Therefore, you want close to 100% share exposure to build up as much pension capital as possible. When you start approaching retirement, you want to take less risk because the money will be needed shortly. A bad stock market year could mean that you cannot retire but have to postpone it. Therefore, you want to "secure" some of the money. Of the solutions available today, e.g. premium pension fund AP7 SÅFA's solution the best known. Until the age of 55, they have full throttle with 100% (and sometimes even higher) equity exposure and after that they start to slow down by about 3% per year. So a 65-year-old has on average 70% stocks and 30% interest. This step down from shares to interest rates is often called the English word glidepath or in Swedish risk reduction, risk step or risk step down. The problem with entrance solutions (even with good actors) The problems we talk about in the episode with Patrik is that most of these glidepaths should suit everyone and then they rarely suit anyone. Even solutions that we like with occupational pensions at e.g. Avanza has a rather poor solution with its entrance fund "Avanza 75". It provides 75% equity exposure and 25% fixed income exposure. It is perfect if you are about 58 years old, are going to retire at 65 and follow the type model that AP7 SÅFA has. In almost all other cases it is wrong. It is wrong for a 40-year-old who has 25 years left until retirement because he should have 100% shares. It is wrong for a 65-year-old who will retire next year because he should have more interest. It is also wrong for the 58-year-old who wants to retire at 63. It gets even worse when we look at many of the collectively agreed pensions that force even young people into traditional management with an even higher percentage of interest. Transfer pension to Lysa In practical terms, you register via Lysa's website, then they will help you - free of charge - to investigate which pensions you have that can be transferred. You then get to approve a possible move to them. Read more about pension on Lysa's website: https://lysa.se/flytta-till-lysa?camp... Links ==== Follow discussion in the forum: https://rikatillsammans.se/forum/t/92663 Become customer at Lysa (ad link) https://rikatillsammans.se/partner/lysa JFB's compilation from the pension companies: https://rikatillsammans.se/forum/t/st... Table of contents ==== 00:00:00 Intro 00:04:20 How the Swedish pension system works 00:07:03 Should we be worried about the pension system? 00:10:40 Who is this episode for? 00:12:37 Transfer of pension is incredibly slow 00:21:23 A million dollar mistake 00:28:20 Lysa's tailored risk management 00:38:01 Equal withdrawals throughout the pension - boom or bust? 00:40:45 Repayment protection pension 00:47:02 What will the cost be? 00:48:57 Who can and should transfer their pension to Lysa? 00:52:48 Scary to have the children's, my own and Lysa's pension 00:54:35 The value of adjusted risk