Using My Personal Pension Savings
You have many options on how you choose to use your personal pension savings. You could use the savings to travel, to finance exciting hobbies, or reduce your work hours or retire completely earlier. The savings can also be used to acquire your home faster by paying regularly towards the principal of your mortgage. How will you use your savings?
From the age of 60, you can withdraw your savings in monthly instalments or in a lump sum. If you want to retire and stop working altogether, you can use the savings as income. If you continue to work part-time or full-time, you can increase your income with the private pension savings or use it as a reserve fund.
Use your personal savings tax-free
If you want to increase equity in your home faster and/or lower your payments over time, it may be a suitable option for you to use your private pension savings to pay towards the principal of a mortgage tax-free, i.e. without paying income tax on the pay-out.
You can also withdraw accrued personal pension savings when buying real estate. This does not have to be your first property, but it is only possible to use personal pension savings that have accrued during the time when you or your spouse did not own real estate.
Find out more on the website of Iceland Revenue and Customs. (Skatturinn)
Reserve fund in case of disability
If you are unable to work due to a disability caused by an accident or illness, you are entitled to have your personal pension savings paid out in at least seven years or in the time period until you reach the age of 60. If the balance is below a certain criteria of ISK. 1,616,426 you can have the deposit paid out in a lump sum or over a shorter period than seven years.