In the Netherlands, the pension consists of three parts: pension from your employer and accrued pension yourself. Everyone is entitled to an pension benefit after reaching retirement age. The other two forms of pension are not compulsory. But when do you actually accrue pension?
From when do you build up for your pension
Everyone who lives in the Netherlands accrues pension. This starts 50 years before you reach retirement age. You therefore accrue 2 percent of your pension each of these 50 years. In the first instance, the accrual of your pension started at the age of 15, but for future generations this starts later because the retirement age is also shifting. Bear in mind that you do not accrue pension if you live abroad.
When do you build up pension through an employer
The rules for pension accrual via the employer are not laid down by law. An employer does not have to offer a pension plan, so sometimes you do not build up a pension through your employer. Certainly if you have different side jobs at a young age, you often do not build up a pension. Many employers only offer this scheme from the moment you are 21 years old. But if, for example, you have a temporary contract, work few hours and / or work on a temporary basis, you often do not participate in a pension scheme.
This does not have to be a problem. If you were to build up pension with these jobs, you would only build up a very small amount of pension because you earn relatively little. That is why for most employees the accrual of the pension starts from the moment they actually start work after school or study.
When do I have to build up a pension myself?
The age at which you yourself have to start building up pension depends on your personal situation. If you find pension sufficient or if you think that you build up enough pension through your employer, you don’t even have to provide a supplement to your pension at all. But if you work for a company without a pension plan, work part-time or do not want to go too far after your retirement, it is wise to build up a pension yourself.
More and more people are opting for this option, certainly because the pension funds are continuing to limit accrued pensions. The guideline for this is that you have to start from the age of 25. But if you study for a long time or if you still have a low wage, it doesn’t have to be a problem if you start later.
How do I build up pension myself?
You can build up your own pension in different ways. Bank savings or an annuity policy are the best known ways, because there is a tax advantage. If you have accrued little or no pension in the past 7 years, you do not pay capital gains tax in box 3 on this accrued pension. You also only pay income tax in box 1 if you have the money paid out. And after your retirement, these tax rates are lower than at the time you work. You also receive a return on the gross amount on the account, not on the net amount that you keep after deducting income tax. On the website of the Tax Authorities you can calculate whether this tax benefit applies to you.