Those over 60 can save and invest most, says Sweden’s AMF
Swedish pension provider AMF says new research points to a far greater ability to access disposable income for savings and investments purposes among the over-60s than any other age group in the country.
AMF said that those over 60 consumed some three-quarters of their total income, with the remainder available for savings and investments.
By contrast, households with people aged 20-39 on average had just 10% of their income available for similar purposes. AMF based its conclusions on analysis of statistics from Sweden’s statistics agency SCB.
Fredrik Nordström, head of Business Development at AMF, said that the findings came even as the Swedish Pensions Agency (Pensionsmyndigheten) warned that retirement income as a proportion of final salary has been falling along with rising longevity.
“The question is what is a suitable level. One way to put pensions calculations into context is to see how much is actually being consumed,” Nordström said.
AMF has called the proportion of income left over after consumption the “savings ratio”. The research suggests that the older a person is the greater the ratio. AMF said that the ratio remains high even after retirement among older people. There are some statistically noticeable differences in ratios among older people, but they are determined by varying income levels.
“Despite the fall in income for most people going into retirement, many can maintain about the same standard of living, because the income is at about the same level as the consumption was before retirement,” Nordström adds.
For younger age groups the correlation between income and consumption is different. AMF said that for households in the 40-49 age group, although incomes were increasing, the proportion available for savings and investments actually fell.