Start preparing early

You have more options than many people realize — and the earlier you start planning, the easier the transition tends to be.

Planning isn’t only about finances. It also helps to look after your health and stay connected to the people closest to you.

When can I start taking my pension?

You can start taking your lifelong pension and your private pension savings from age 60. The standard retirement age is 67, but you can start earlier or later.

• Start earlier: payments are spread over a longer time, so the monthly amount is usually lower.
• Start later: payments are spread over a shorter time, so the monthly amount is usually higher.

Take a little time to understand the options — it can make a big difference.

Can I work and take pension payments at the same time?

Yes. From age 60, you can choose half or full pension payments, even if you continue working.
Keep in mind that work income + pension income may affect your taxes.

TR works differently:

With the Social Insurance Administration (TR), you generally cannot receive a half pension until age 65, and you must be working at least 50% at the same time.

You continue to earn pension rights from work income until age 70. After that, no further contributions are made.

How much will you need?

Your pension is not meant to replace your full salary — but many expenses also change in retirement. Here are a few helpful questions:

Which expenses may change?

Costs related to children, commuting, or maintaining a car often decrease. Spending on activities, travel, and health may increase.

Do you and your partner want the same kind of retirement?

Talk about expectations early. What matters most — travel, hobbies, a summer cottage, more family time, or a mix?

What will your debt situation look like?

Loan payments or rent can have a major impact. Consider whether you can reduce debt earlier (for example through extra principal payments).

Is your home still the right fit?

Downsizing to a home with lower running costs and less maintenance can help your pension and savings last longer.

If you rent, you can also explore options from housing associations that offer affordable rental or purchase opportunities for people aged 50+.

Check your pension rights before you take action

Start by gathering the information you need to choose a pension start date you feel confident about.

What will you receive each month?

Use the pension calculator on My pages/Mínar síður to see estimated payments based on your chosen start age.

What can you expect from TR?

Before choosing a start date, it’s important to understand how your pension payments may interact with TR. Check your status at tr.is.

If you have small pension rights with other pension funds, it may be beneficial to take those as lump-sum payments first, so they do not reduce your TR benefits (where applicable).

Can you keep working if you want to?

Some workplaces allow gradual reduction in working hours or a change in role. Ask your employer about their policy. Many people also choose to continue working as contractors, part-time consulting or freelancing to provide flexibility and maintain their work capacity.

Imagine life after work

It can help to visualize what you want this chapter to look like.

One simple exercise

Create a Pinterest board called “The Life I Want After Work” and save images that reflect how you want to spend your time.

For example:

• more time with children or grandchildren
• hobbies you want to focus on or new ones you want to try
• travel, volunteering, learning, or a slower daily rhythm

Start picturing the life you want to create for yourself.