We Missed One Pension Plan – Apparently We’re Getting Old

There are nine years left until my remaining four private pension plans are paid out.

During the recent downturn in US technology stocks, I decided to sell off most of the funds in my two largest pension plans (which together represent almost 80% of the total value) and reinvest the money in funds with greater exposure to these stocks. With such a long time horizon, it felt like the right move.

My husband and I take great pride in having full control over our investments and pension plans. So you can imagine our surprise when he recently received a letter from Skandia informing him about a fifth pension plan that he had completely forgotten about.

Admittedly, it is his smallest one in terms of value. But after the recent reinvestments and with more than six years left until payout, there is plenty of time for the capital to grow significantly.

We really need to start compiling a complete overview of all our holdings……before the senile dementia sets in properly.

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I am officially old

This Monday I got my first-ever pension payment — and although it'll be another nine years until the next one, receiving it left me with very mixed feelings.

This was a one-time payout, so I decided to invest in a small number of shares in Amazon (AMZN), Pfizer (PFE), Realty Income (O), and UnitedHealth Group (UNH). We've chosen to deviate from our initial strategy of focusing solely on dividend stocks by adding a smaller allocation to growth stocks — hence the inclusion of Amazon (AMZN).

Of the five private pension insurance policies I have in total, I somehow selected age 55 as the starting payout age for this particular one, which was disbursed on my 56th birthday. In hindsight, I really wish I had set age 55 as the payout age for all five policies, because honestly, no one cares about my money more than I do.

For example, in two of the four remaining pension policies, my options are limited to funds only — and even then, just the ones the occupational pension company has approved and included on their platform, rather than any fund I might choose myself. The remaining two pensions were the most recent ones I acquired, and that's when I had the insight to opt for a type of pension account that actually allows me to invest the contributions directly in shares/stocks.

Today, only one of the five pension insurance policies is still receiving ongoing contributions. The other three are now on their own, growing through investment returns without any more additions from me.

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A month of Sundays

The world's most perfect husband has been receiving retirement money every month for the past 3.5 years from one of his private retirement plans. Although it's good that he has access to his own money, it felt a little terrible that he turned 55 and started receiving pension money.

At the beginning of the year, I received a letter from one of my pension administrators, which is completely normal since you always receive information about how the insurance developed during the previous year. What was abnormal was that they would pay out this insurance. Since I hadn't contacted them when I turned 55 last year, they were now going to sell the entire contents on my 56th birthday and wanted an account number for payment. I, who was convinced that I had chosen 65 as the first payment date for all my private retirement plans, was completely shocked.

When the worst of the shock had subsided and I was starting to look forward to investing this money that will arrive at the end of this week or the beginning of next, the world's most perfect teenager came with a request.

He will be taking his final exams for his IB Diploma Programme in April and May this year and was wondering if he could get a tutor. The exact same thing happened last fall when I received a small inheritance. Unaware that I had just received the money, he asked if he could get a tutor for his SATs. Since he did exceptionally well on the SAT exam, I cannot say no to this.

So once again a large portion of my money goes to the world's most expensive accessory...

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A different kind of pension system

For transparency and my own agenda, I strongly dislike our previous government, the Social Democrats with the support of the Green Party and the tacit acceptance of the Left Party. Politically, I am very far from the Swedish Social Democrats, their partner parties, communism and socialism.

Like pre-industrial and early industrialized Sweden (as in most agricultural societies), the Swedish population relied on a high birth rate, primarily to support their parents in their old age, there are still countries where people secure their pensions by having many children.

At the beginning of the 20th century, a change took place in Sweden and people largely stopped relying on having many children primarily as a way of securing their old age, with the decisive turning point around 1913–1935.

In 1913, Sweden introduced the world's first universal public pension system, a basic old-age and disability pension available to all citizens. In 1935, the system was significantly reformed and strengthened with a more comprehensive universal basic pension (folkpension), which became a cornerstone of the emerging Swedish welfare state.

Even though I gave birth to the most perfect child in the world and therefore should have significantly more 😉, I'm grateful that I don't have to. But given how badly Swedish politicians, and I'm thinking mainly of the left-wing politicians, are eroding Swedish pension money through countless of reckless investments in both green energy and startups, maybe we have to return to the old system...

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Double-edged feelings

23 days into December, we are still waiting for more than 70% of the month's total dividends. Exactly all of our remaining dividends have payment dates of December 30 or 31, which means that this money will only be available to us after January 2, 2025.

December 2024 will be the first month in over 16 months that we invest part of our salary instead of just paying mortgage interest. Even though we save by reinvesting all dividends, it feels incredibly good to add money "from outside" the portfolio.

The world's most perfect husband, who has had one of his private pension insurance policies paid out since he turned 55, reminded me to check if I can activate any of my pension insurance policies since I turn 55 next month. Just the thought of receiving a pension scares the living daylights out of me, when did I get this old?

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I still think Northvolt AB will go out of business

The problems in the Swedish battery company Northvolt AB and its subsidiaries do not seem to end.

The reason why one of the subsidiaries, Nortvolt Ett Expansion, was declared bankrupt on October 8, 2024 was, according to the then CEO of the parent company Peter Carlsson, "to stop the expansion in Skelleftea, which in turn was a consequence of the group's deep financial crisis" writes the state-own Swedish television (SVT).

Initially, the bankruptcy trustee estimated the debts at $169,000,000-$253,000,000 but the bankruptcy filing shows that the debts amount to $582,000.00 while the assets are only $109,000,000. At the same time, the parent company Northvolt AB continues its struggle to survive.

On November 21, 2024, the company announced that it and a number of its other subsidiaries filed for Chapter 11 proceedings in the United States to secure financing while implementing a restructuring.

Personally, I am grateful that the current government has not chosen to add additional tax money to the company. That the company 4 to 1 Investments, which was created in 2021 jointly by the pension funds AP 1-4 under great secrecy to be able to invest in unlisted holdings, has invested $489,000,000 of the Swedish pension owners' money in the parent company Nortvolt AB is bad enough.

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Good intentions do not excuse bad results

Grossly simplified, politics is ultimately about pitting groups against each other. Politicians control the distribution of tax money and decide not only which groups get to share in tax money, but also how much they get. This creates contradictions between the different groups. An example of this is the pension payments.

In an interview, Anna Pettersson Westerberg, director general and head of the Swedish pension authority, says quote "The Swedish pension system is fundamentally based on reasonable principles - that every krona earned gives a higher pension. The changes of recent years have meant that the principle of living income and the drive to work have eroded." unquote.

In Sweden, we have a state basic allowance that compensates those who have worked part-time or not at all, and the number who receive it is quite high. More than 60% of all pensioners receive some form of basic support. For example, of the Swedish citizens aged 66 and over, 14% of them receive a guaranteed pension.

The guarantee pension is a basic protection in the general pension which is for those who have had means, little or no income from work during their life. It is mainly based on how big your income pension is and how long you have lived in Sweden, but also your marital status.

The Swedish pension is part of the salary cost and in reality a deferred salary. Then paying out money to people who never deposited money into the system will be unsustainable in the long term. As long as the number of pensioners who withdraw money through guaranteed pensions is small and does not affect the other pensioners by more than a few cents, people accept it. But when cents turn into hundreds of dollars, the situation becomes completely different.

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"The crime" without punishment

One of Sweden's largest occupational pension companies, Alecta, is once again in trouble. The latest was in 2022 when it emerged that they had invested large sums of pension money in SVB Financial Group Stamaktie (SIVB). Now it has been discovered that Alecta apparently did not learn but continued with its bad investments even the following year, i.e. 2023, with the Swedish pension money.

The battery storage company Polarium was predicted to have a bright future with sky-high profit growth when Harald Mix sold billions in shares to Alecta in autumn 2022, with an investment basis that JP Morgan was very positive about. The outcome was instead large losses, a collapse in valuations and finally a cash crisis. According to its own statement, the company would make the world more sustainable with its smart modular energy storage solutions, built on lithium-ion technology.

Those who enable the looting of public funds such as tax money, pension money or the like are either extremely naive or they get their share of the pie. I am thankful that me and the world's most perfect husband understood in our twenties that we will not receive a nickel from the tax payments we make during our working lives.

Ignorance costs

OFS Credit Company, Inc. Common Stock (OCCI) has announced that it is increasing its dividend by 9.5 percent to $0.115 per share. The holding of (OCCI) in our joint portfolio amounts to 3.5 percent. In my pension insurances, the holding in (OOCI) is significantly more dominant in relation to the total value, which means that this increase will be significantly more noticeable in these.

I worked for a couple of years in my youth at a company that paid into traditional pension insurance for me. Because I worked there for a short period of time, I only qualified for a smaller amount, $1,200. I have been neglecting this retirement saving and until today have never logged in to see any potential progress. I was very surprised to see that the value had increased to $7,205.

Tomorrow I will contact the manager and request a login code that will allow me to switch funds if I so wish. There is still more than 10 years to go before the first payout is due so I still have the chance to take control of this money. If I had committed to this savings and made sure to have a return of 10% per year, today's value would have been $18,355 instead.

No one cares about your money as much as you do. - Liza Dewlar

A good but at the same time bad investment

For full transparency, neither I nor the world's most perfect husband have any interests in AP7 as we both made active choices and moved our pension money to other more profitable funds.

A part of Swedish employees' general pension is invested in funds. If no active choice is made, the money is managed by AP7, which is the government's default option. According to AP7, this fund mainly focuses on the environment, ethics, sustainability and also start-ups.

Risking future pension money on start-ups is not smart in my opinion as they often fail, for example AP7's venture into Cake. Now it has emerged that AP7 has invested in Emaar, which is a real estate giant in Dubai. This investment sits badly with their motto ethics as Emaar has contributed to money laundering via both the Italian Camorra and the Irish Kinahan Cartel through the sale of flats and villas. But financially, this is a good investment for future retirees.

If AP7 is to be an attractive option for future Swedish pension investors, perhaps they should remove the motto ethics and continue with profitable investments.

I prefer investing to paying interest

For the past 18 months, the world's most perfect husband has been receiving money from one of his private old age pension insurances. This time, he reinvested the payout in Crescent Capital BDC, Inc. Common Stock (CCAP).

Because we were foresight and realized early on that a policy rate of 0% is neither healthy nor likely to last long, we chose to live as if the policy rate were 3.5%-4%. We decided to cut the coat according to its cloth and at the same time get a "free" saving. So instead of spending the money, we chose to invest it.

Given that we are now paying a healthier interest rate on our mortgage, it was a blessing in disguise that the husband turned 55 the year before last so one of his old age pension insurances started paying out. That way, "we" still save, even if it's only half of what we saved before.

Should the key interest rate be lowered, we will return to our previous course of action and invest every single cent in the stock market again.

Why should Swedish pension savers save the climate with their pensions?

For transparency and my own agenda, I strongly dislike our previous government, the Social Democrats with the support of the Green Party and the tacit acceptance of the Left Party. Politically, I am very far from the Swedish Social Democrats, their partner parties, communism and socialism.

Both myself and my husband made an active choice many years ago and moved our pension money from AP7.

The premium pension is part of the Swedish general pension and are included in the PPM system. Available state-controlled funds in the PPM system are AP1, AP2, AP3, AP4, AP6 and AP7. These 6 funds make up the largest part of many Swedes' public pensions. All Swedes who do not make an active choice and change fund managers automatically end up on AP7.

Earlier this year, it emerged that former social democratic governments have loosened the rules around pension money and now the 6 AP funds can invest in, among other things, start-up companies, mainly AP7.

Today, both AP3 and AP4 are questioned because they invested in the company TotalEnergies, which is currently building a new oil pipeline through Uganda and Tanzania. Kristina Ostman, head of climate at the Swedish Nature Conservation Association, quote "This is a terrible project. It leads to the forced displacement of the local population and the destruction of the ecosystems." unquote.

As much as people worry about the climate, I'm guessing that the number of people willing to risk their old age for the sake of the climate is few.

One could change the direction of one of the AP funds to focus solely on climate-promoting projects and completely ignore returns. Similarly, another AP fund can be converted to focus only on start-ups and zero focus on returns. To place your pension money in one of these funds, you would have to make an active choice.

I suspect that interest in a fund with a total lack of return would be close to zero.

Catch-22

I have 2 pension insurances and my husband has one that we still pay into. In one of mine you have to buy mutual funds. Although I can sell and choose other funds, it is not something I do more than maybe a couple of times a year.

In the second pension insurance, I choose which shares to buy myself. Each premium payment is like a deposit, if I choose to refrain from making an acquisition for a month, the money will remain as liquid assets. My husband's pension insurance works the same way as my last one.

I don't mean to sound rude and ungrateful in any way, but investing this money isn't nearly as much fun. This is due to several reasons, but mainly because it is pension money.

That is money we will get when we are OLD. It's almost the same feeling I have about our home insurance, it's good to have but the best thing is if you never need it.

I don't want to get old but the alternative is to die and I don't want that either.

Anyway, yesterday we bought a total of 100 shares of Gladstone Capital Corporation (GLAD) in these pensions.

I have 12 years left before I can withdraw this money

This morning, dividends from Guggenheim Strategic Opportunities Closed Fund (GOF), NewTek Business Services Corp. (NEWT), Oxford Lane Capital Corp. (OXLC) and PIMCO Dynamic Income Fund (PDI) were credited for my pension insurance.

I have $476 available for purchase in the account. I need to buy 68 more shares in OXLC to get to even 3000.

I will have about $100 after the upcoming OXLC acquisition. After I am fully invested in OXLC I will start buying HRZN.  Horizon Technology Finance Corp. Common Stock (HRZN) has a current yield of 11.38% and they pay out monthly.

Since my pension insurance currently has an annual dividend of $2800, it will be about 4 years before I have my first HRZN 1000 shares.

I'm not sure he feels the same way.

In one of my pension insurance, I bought 35 shares of Medical Properties Trust, Inc Common Stock (MPW) today. This particular pension insurance is locked until 1 February 2025. How big the value is when it is paid out to me is difficult to predict. Especially with everything going on in the world.

My largest pension insurance won't payout until 2035. It annoys me very much that I chose such a late payment date. The world's most perfect husband was so much smarter who opted for an early payout. If we don't need the money when it will be paid out, I will reinvest it in my portfolio.

When my first insurance is paid out, the world's most perfect teenager still has 1.5 years left in upper school. Today, he is set on studying at a university abroad. How he feels in 3.5 years remains to be seen. If he leaves the country, I hope we have the financial means to follow him. I can't imagine not living in the same country as Junior.

To put all one's egg in one basket

There are approximately 3,300 people in Sweden who had their entire premium pension in Russia funds. Premium pension is part of the Swedish general pension. Each year, 2.5% of your pensionable income and other taxable compensation is set aside for the premium pension. You choose yourself whether you want to invest the money through fund selection or whether you let the money remain in the government's pre-selection option AP7.

Those with holdings in Russia Funds had their holdings completely erased in February when the Moscow Stock Exchange closed. For the approximately 3,300 who have had their entire premium pension deleted, this means a loss of income of approximately $100-$200 a month. About 24,000 people had a portion of the premium pension in Russia funds will, starting at the turn of the year, have their payments reduced by about $100 per month forever.

5 years ago, my premium pension consisted of 50% Russian funds. For some reason that I can't remember today, I decided to sell off the entire Russia holding. Sometimes it turns out very well.

The experiment part XV

This morning the familiar ka-ching sound was heard. It was my monthly payout from Oxford Lane Captial Corp (OXLC) in my pension insurance.

Tonight I bought another 50 shares of OXLC, now only 2 shares are missing for half the holding to have been bought with dividends. Most likely this was the last acquisition of OXLC, which stock I will increase in next time remains to be seen.

This particular pension insurance only pays out on my 65th birthday, I have a few years to build up a bigger portfolio.

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More money than expected

Having received more in dividends than in both 2020 and 2021 with 1 dividend month left in the year is better than I anticipated. The biggest reason we increased our dividends so much this year is because the most perfect husband turned 55 this summer and one of his larger old age pension insurance was paid out as a lump sum.

As usual, he is so much smarter than me. He chose to have this particular pension paid out at the age of 55, unlike me who chose 65. I can take solace in the fact that I at least chose a pension insurance where I can sell and buy holdings myself. Hopefully the value in the insurance will be much higher then. Although it's nice to get pension payments, it's also terrible to already be at that age. Now I hope to receive one or two special dividends during December.

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The experiment part XIV

Although I have not updated the blog for 2 years, the world's most perfect husband and I have continued to work according to the plan with minor adjustments. Something that has not changed is that all dividends from the one pension insurance have been reinvested in OXLC. It took longer than I thought, probably due to the pandemic, but finally half of the OXLC holdings are funded by dividends. One of my Google Sheets is updated, many more to go…

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I am married to an old man

This summer, mr Dewlar received his first pension payment. Although he is not an old-age pensioner, it was one of his private pension insurances that started to pay out. It felt strange when the first payout came. 

I thought something was wrong, we are not that old. We have a teenage son who just turned 15. Even mr Dewlar thought it was a strange feeling. Another insurance was actually going to start being paid out, but he moved the date forward.

We started our pension insurances when we were in our twenties. Then it felt like it was light years away before they would start bearing fruit. Obviously I must have blinked because here we are now…

Thank God there are two more years left until my first insurance is paid out.