The Danish Parliament has approved raising the state pension age to 70 by 2040, impacting those born after December 31, 1971. This decision aims to address long-term financial sustainability but raises concerns about the affordability of retirement for many Danes.

A significant portion of the population may struggle to maintain their current living standards upon retirement. According to an analysis by Danica Pension, with a retirement age of 69, one-third of Danes risk not being able to afford their current lifestyle, including housing, cars, travel, and other experiences.

The increase to age 70 could push over half of Danes into a situation where they cannot afford their accustomed standard of living. This may force them to make difficult choices, such as selling assets or downsizing their homes.

Early retirement will become more expensive. Nordea’s calculations show that a 53-year-old earning 35,000 kroner monthly with a 12% pension contribution and 1.7 million kroner in pension savings would need to contribute an extra 1,300 kroner per month to retire at 69 instead of 70. Retiring at 67 would require an additional 4,400 kroner per month.

Working longer can lead to increased pension savings. Sampension’s calculations indicate that someone earning 400,000 kroner annually with 2 million in pension savings and a 15% contribution will see their savings increase by approximately 128,000 kroner by retiring at 70 instead of 69. This translates to an increase of about 1,200 kroner per month in lifelong pension payments.

Experts suggest strategies to mitigate the financial impact of delayed retirement. Betina Grimstrup from Nordea recommends considering alternative savings options like share savings accounts for greater flexibility. She also advises creating a pension plan, including assessing which pensions to draw from first, starting with life annuities. Finally, understanding the payout age of different pension schemes can help optimize retirement income.