This is how I adapt ProjectionLab for Swedish taxes

Today ChatGPT and I spent time adjusting my settings in ProjectionLab for Swedish taxes and FIRE planning. I realized that I needed to make some adjustments to take into account everything from the ISK tax to our pension system. When everything was done, I felt that my plan is now at least a little more like the truth.

Lystring FIRE geeks : Feel free to imitate me but I make no guarantees that I have done it right!

For the full table with all changes, scroll down

Tax on ISK

The first thing I needed to adjust was the tax on my investments. In ProjectionLab, "capital gains tax" is set to the American system, but here in Sweden we have our dear standard tax on ISK accounts. For 2024, it is set at 1.086% . I had to enter this manually as "capital gains tax" to get an accurate picture of my investments.

The pension system: The Swedish advantage

The next adjustment was about how I calculate my pension. There are a few different ways to deposit incoming money in the program, such as income, pension or passive income, before tax or after tax. After a lot of fiddling, I decided that the easiest thing for me was to do a simulation in "My Pension", deduct estimated tax and enter it as a passive income. This allowed me to reduce my own savings quite a bit because I don't have to rely entirely on my investments during traditional retirement even if I stop working early. I have made two plans in Projection Lab, one where I start drawing pensions at 55 and one at 65, to be able to compare differences.

It feels incredibly good to know that a large part of my future expenses will be covered by the Swedish pension system. I now need to save less than I originally thought. It looks like my FIRE savings just need to bridge the time between early retirement and retirement age. After that, I don't need to make very large withdrawals from the investments, because the fixed expenses will be quite low and the pension will be enough to cover them.

Tax Setting	Default (US) Value	Adjusted (Swedish) Value	Notes & Sources
Ordinary Income Tax	Progressive federal and state rates based on filing status	- Municipal Tax : ~30% on all income - State Tax : 20% on income over SEK 613,900 annually (2024 threshold)	In Sweden, we pay a municipal tax averaging around 30%. There's also a state tax of 20% on annual income exceeding SEK 613,900. Filing status isn't applicable since taxes are individual.
Capital Gains Tax	Progressive rates (0%, 15%, 20%)	Flat rate of 1.086% on total invested capital in ISK accounts	We use an Investeringssparkonto (ISK) for investments. The tax for 2024 is 1.086% of the account's total value
Dividend Tax	Taxed as ordinary income or at capital gains rates	Included in the 1.086% ISK tax	Dividends aren't taxed separately in an ISK; they're part of the account's total value that's taxed annually.
Filing Status	Single, Married Filing Jointly, etc	Not applicable	We don't have filing statuses; everyone is taxed individually.
Financial Transaction Tax	None	Not applicable	Sweden doesn't have a financial transaction tax currently.