What should you save for retirement? The complete guide
The overview that ties together the state pension, account types, savings order and withdrawal — with three profiles and a calculator
The complete guide to pension saving in Denmark 2026 — folkepension, ATP, the pension supplement, account types, savings and withdrawal order in one place, with three profiles and an interactive calculator of your monthly net income in retirement.
Most people who start thinking about retirement ask four questions: How much should I save? Which account should I use? When can I retire? And what will I actually receive?
Those are the right questions. But most people ask them in the wrong order and with the wrong focus. They calculate gross savings — the figure on the account — and forget that what really determines how much you have to live on is something else: the monthly net income after tax and after the public benefits your savings can reduce. Two people with exactly the same savings can end up with very different finances, purely because of which accounts the money sits in, and when it is taken out.
This guide brings the whole picture together in one place. It explains what you already have, what really determines your situation, and how account choice, savings order and withdrawal all connect. Along the way it links to the in-depth articles that work through each part in detail. At the end, a calculator lets you put numbers to your own situation.
What you already have
Before you calculate on personal savings, it is worth knowing what you get without doing anything. For most Danes, the pension rests on three layers, and the bottom two are in place long before you save a single krone yourself.
The state pension (folkepension) is the first layer. It consists of a basic amount, which everyone receives, and a pension supplement, which depends on your other income. In 2026 the figures are:
| Monthly | Annual | |
|---|---|---|
| Folkepension basic amount | DKK 7,544 | DKK 90,528 |
| Pension supplement (single, maximum) | DKK 8,729 | DKK 104,748 |
| Pension supplement (married/cohabiting, maximum) | DKK 4,467 | DKK 53,604 |
For a single state pensioner with no other income, folkepension and full pension supplement together come to DKK 195,276 per year — DKK 16,273 per month before tax. That is the baseline; everything else is added on top.
ATP Livslang Pension is the second layer. ATP (Arbejdsmarkedets Tillægspension — the Labour Market Supplementary Pension) is the statutory supplementary pension almost all employees have paid into throughout their working lives. It is paid for life on top of the state pension. For an average member the benefit in 2026 is around DKK 17,340 per year; a fully paid-up arrangement gives up to around DKK 26,000.
The occupational pension is the third layer — and the first where there are large differences between people. If you are employed under a collective agreement, you and your employer typically pay 12–18% of salary into a pension fund (Lærernes Pension, Industriens Pension, PFA, PensionDanmark and the like). Over a full career this becomes the largest single item for many. If, on the other hand, you are self-employed or have been for a long time, this layer may not exist at all — and then the entire third layer must be built from personal savings.
The first two layers, then, arrive by themselves. The third — and everything beyond it — is what the rest of the guide is about.
The one question that decides everything
Before you choose an account type or an amount, there is one question that shapes all the others: do you hit the pension supplement reduction zone?
The pension supplement is income-dependent. For a single retiree in 2026 it is reduced by 30.9% of the part of your other income that exceeds DKK 99,200 per year, and it disappears entirely above DKK 438,200. “Other income” is everything beyond the folkepension itself — ATP, occupational pension, ratepension, interest income and stock returns from a taxable account all count. Returns from the stock savings account and aldersopsparing do not.
The consequence is an effective marginal tax rate that few people know about. In the reduction zone you pay both ordinary income tax and lose 30.9% of every extra krone in forgone supplement. Together that gives an effective marginal rate of roughly 56–67% — on a par with the top tax bracket, but for entirely ordinary retirees. A single person with an average occupational pension hits the threshold at around DKK 82,000 in occupational pension plus ATP.
That is why the question decides everything: if your total pension lands in the zone, it changes which accounts are most valuable, and when you should take the money out. The mechanics — and an interactive curve showing exactly what the zone costs month by month — are covered in The pension supplement trap.
The account types, in brief
There are four account types to save a pension in. They differ along three axes: the ongoing tax on returns, the tax on payout, and whether the return counts towards the pension supplement.
| Account type | Ongoing return tax | Tax on payout | Counts towards pension supplement |
|---|---|---|---|
| Aldersopsparing | 15.3% (PAL) | None | No |
| Ratepension / life annuity | 15.3% (PAL) | Personal income (37–52%) | Yes |
| Stock savings account (ASK) | 17% (mark-to-market) | None | No |
| Taxable account | 0–27% depending on asset | 27/42% of gain | Yes (gains and dividends) |
PAL stands for pension return tax — the annual 15.3% tax on returns in all pension arrangements. The most persistent misconception is that the deduction for ratepension in itself makes it a good deal. It does not: the deduction is deferred tax, not saved tax. If your marginal rate is the same when you pay in and when you draw out, the deduction nets to zero. What really decides the choice is the difference between your tax now and as a retiree — plus the pension supplement effect.
The full calculation, with end wealth after all taxes across the four account types, is worked through in Ratepension or taxable account?. The stock savings account has its own thorough walkthrough in Stock savings account 2026, and the underlying tax rates and principles in the guide to stock taxation.
The savings order
The rules can be boiled down to a priority that fits most private savers. It is built on the tax profile — not on which product your bank would most like to sell.
- Employer match first. If your employer matches your pension contributions, that is a return you cannot get anywhere else. Take it, whatever the account type.
- Aldersopsparing up to the ceiling. DKK 9,900 per year, or DKK 64,200 if you are within 7 years of the state pension age. The best tax profile in the field: low ongoing tax, no tax on payout, no pension supplement effect.
- Stock savings account up to the ceiling. 17% mark-to-market tax and neutral for the pension supplement. The ceiling is DKK 174,200 in 2026.
- Ratepension — if you pay top- or middle-bracket tax. The deduction value must be markedly higher than your expected payout tax before the bet is a good one. The deduction ceiling is DKK 68,700 in 2026.
- A taxable account for the rest. Here there is no ceiling, but also no special tax advantage.
Note what the order does not say: it does not say “maximise ratepension because the deduction is large”. The size of the deduction is not the argument — the relationship between your tax now and as a retiree is. The full reasoning and a concrete worked example are in Ratepension or taxable account?.
The withdrawal order
The savings order has a mirror image in retirement: the withdrawal order. Most people spend decades thinking about where to save — almost no one makes a plan for how the money should come out again. And that is a shame, because the order can cost or save hundreds of thousands of kroner over a retirement.
The reason is, again, the pension supplement. By steering which accounts you draw from and when, you can keep your other income either below the reduction threshold of DKK 99,200 or clearly above the phase-out threshold — and avoid parking in the expensive middle zone longer than necessary. Sources that do not count (aldersopsparing, the stock savings account) are well suited to covering spending in the years when an extra krone from ratepension would otherwise push you into the zone. A ratepension can also be stretched over up to 30 years, which lowers the annual payout.
The full mechanics, with a worked example where the same savings produce more than DKK 100,000 in difference on the pension supplement alone, are in The optimal withdrawal order in retirement.
The house belongs in the plan
For most Danes the home is the largest single item of wealth at retirement — and the most overlooked part of the pension plan. It has an unusual tax profile: the appreciation is generally tax-free under the primary-residence rule (parcelhusreglen). But it also locks up a large share of your wealth that you cannot live on while you live in it.
The question of staying, selling and renting, or paying down the loan versus investing, can shift your monthly finances noticeably. And the equity has a link to the pension supplement: if you invest it in a taxable account, the return counts towards your other income; if you invest it in a stock savings account, it does not. The calculation — with 2026 rates for property value tax, land tax and interest deduction — is in Own, rent or invest.
Three profiles
The rules are the same for everyone, but the right strategy depends on where you stand. Here are three people in very different situations.
Line, 35, primary-school teacher
Line is employed in the state school system and pays into Lærernes Pension through her collective agreement. Over a full career she builds up a solid occupational pension — and that is precisely why she is the classic candidate for the pension supplement trap. With a lifelong occupational pension of, say, DKK 90,000 plus ATP, she already lands above the DKK 99,200 threshold before touching any personal savings.
For Line it is not about saving more into deduction-eligible pension arrangements — that would push her deeper into the reduction zone. It is about saving in forms that do not count: aldersopsparing up to the ceiling and then a stock savings account. That way she builds a buffer she can freely draw on as a retiree, without each withdrawal costing her lost pension supplement. On top of that, ASK’s low flat 17% rate is attractive for an equity-heavy portfolio compared with a taxable account’s 27–42%.
Mads, 45, self-employed
Mads runs his own small business and has never had an occupational pension. His third pension layer is empty — there is no employer to match, and no pension fund making automatic deductions. On the other hand, he is further from the pension supplement trap than Line, precisely because he does not have a large occupational pension filling up the threshold.
For Mads the most important task is simply to get started and do it systematically. The savings order suits him well: aldersopsparing first, then the stock savings account. Ratepension only becomes genuinely interesting if his profits in good years lift him into middle- or top-bracket tax — then the deduction is worth more than the payout later costs. Because he controls his own contributions, he can let them follow his income: more into pension in the fat years, less in the lean ones. His challenge is not tax optimisation but discipline and a consolidated overview of savings that no one else keeps track of for him.
Helle, 52, executive
Helle earns well above the top-tax threshold and pays around 52% marginal tax on the upper part of her salary. For her, ratepension and life annuity are attractive in a way they are not for Line and Mads: the deduction is worth up to 52% now, and as a retiree she expects a lower rate. The 15-percentage-point difference is a real, lasting gain on top of the low PAL tax.
Helle also has an advantage regarding the pension supplement: her total pension payouts are likely to be so large that she lands above the phase-out threshold of DKK 438,200. Then the supplement is gone anyway, the reduction zone is not a problem, and the marginal rate is normal again. She can therefore fill up ratepension and life annuity with a clear conscience, take aldersopsparing along as a tax-free bonus, and use a taxable account for what exceeds the pension ceilings. With 15 years or fewer to pension age, she also gets full value from the extra pension deduction of 32%.
Common to all three: the right strategy follows from the situation, not from a universal piece of advice. What you can adjust is exactly what the next calculator lets you try out.
Estimate your net income in retirement
The calculator below estimates your monthly net income as a retiree — that is, what you have to live on after tax and after the pension supplement reduction. It adds together the folkepension basic amount, your pension supplement, your other lifelong pension and a drawdown from your own savings, and subtracts tax. The bars show the result for each of the four account types, so you can see how the account choice affects your particular situation; the buttons select which type the key figures below apply to.
A few abbreviations recur: PT is the pension supplement (pensionstillæg), ASK is the stock savings account, and PAL is the 15.3% pension return tax. “Other lifelong pension” in the calculator covers ATP and any occupational pension added together — both count in full in the pension supplement calculation. “Marginal tax” is the combined tax rate on the last krone of your income as a retiree.
Try turning up the other lifelong pension: as you cross DKK 99,200 in other income, the account types that count towards the pension supplement (ratepension and the taxable account) start to fall behind those that do not (aldersopsparing and ASK).
How to get the overview
A pension plan requires two kinds of figures that most people do not have gathered in one place: what you expect in pension payouts, and what your free savings are worth and yield after tax.
For the pension payouts, Pensionsinfo.dk is the starting point. It is a public service (in Danish) that aggregates your arrangements across all pension providers and shows your expected payouts from ATP, occupational pension and any employer-administered schemes. Those are the figures you need to hold against the pension supplement thresholds.
For the investment side, I have built Portfolio Manager — a Danish tool that brings your accounts into a single picture. Today it consolidates your investments from Saxo and Nordnet across the stock savings account, taxable account and other holdings, calculates Danish stock tax and your GAK (average cost basis — the price your gains are measured against), and shows your rebalancing tasks. It gives you the half of the overview that concerns assets and after-tax returns.
What the tool cannot do yet, I will be honest about: it does not pull in your pension data, it does not simulate withdrawal scenarios, and it does not model the pension supplement effect automatically. Those parts are planned but not built. Until then, Pensionsinfo delivers one half and Portfolio Manager the other, and the reconciliation is yours to make — for instance with the calculators in this article series. If you want to try the tool, you can read more about Portfolio Manager.
This guide explains the rules and the connections — not what you personally should do. The rates apply to 2026 and are adjusted over time, and your situation depends on your specific income, arrangements, pension age and marital status. Consider talking to an independent pension adviser before moving larger amounts or settling on a fixed pension plan.