Lake Rettarvatn is on the border of two districts. It has an area of 2,1 kmē, only 2 m deep and located at 549 m above sea level. Its discharge, river Skamma, cascades into lake Arnarvatn. The lake abounds in lake char and brown trout and it is considered the best fishing lake of the area.

There are good spots for camping and a 4wd track takes you all the way to its banks. The distance via Laugarbakki from the capital is about 233 km by the Whale Bay tunnel and 55 km from the hamlet Laugarbakki. If you travel over the mountain pass Kaldidalur, past the farm Kalmanstunga, the distance from the capital is about 200 km.