Choice of pension profile and mutual fund
The choices you make today can have a big impact on your future. It is therefore important to make the right investment choice for your pension.
Select the pension profile or mutual fund in which your pension will be invested
Your investment options depend on the type of pension account you have
Applies to the own pension account scheme which consists of a defined-contribution pension and a pension capital certificate.
What is a pension profile?
A pension profile can consist of different proportions of shares and fixed-income securities, and it is important that you choose what is best for you.
When choosing a pension profile, it’s important to evaluate the proportion of equities. You should think about how much risk you want to take, your expectation of return and how many years it is until you retire. If you still have many years left, you are less exposed to fluctuations in the market as the risk of a high proportion of equities is distributed over a longer period of time. Experience tells us that the market overall will rise in the long run. Historically, stocks have provided a better return than fixed income securities, but also higher risk. Note that historical returns are no guarantee of future returns.
Reduced risk towards retirement age
For those with a pension profile, the proportion of shares is automatically reduced every quarter as you approach retirement age. This is called down-weighting. The money is thus less exposed to fluctuations in the market.
If you have chosen a fund yourself, you get no automatic reduction of risk in your pension savings. If you want automatic down-weighting, you can change to a pension profile. Changing funds in your portfolio can also contribute to risk reduction.
Illustration of down-weighting
Down-weighting
Down-weighting means reducing the risk in your savings as you approach retirement age. You start with a higher proportion of equities at a young age, and when you get older you get less shares and more fixed-income securities. This is how to avoid having too high a risk in your savings as you approach retirement age.
If you have switched off down-weighting on your pension profile, you can switch it back on at any time in the online bank and in The Spare app under:
- Pension - Pension account/Pensjonskonto Flex
- My investment options
- Change down-weighting - Adjust down-weighting
Pensjonskonto Flex (Pension account Flex)
If you would like more investment opportunities, you can choose Pensjonskonto Flex. It gives you access to a wide selection of pension profiles and competitive mutual funds.