Eight facts every expat should know about Dutch retirement benefits

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Living in a foreign country is not always easy, especially if you are not fully familiar with the local language. Given all the questions and challenges expats face, retirement planning is often not their top priority. However, retirement planning is crucial to have a worry-free financial future. In this article, we help you understand the key features of the Dutch pension system that every expat needs to know.

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Bikes visualizing the challenge of navigating your life in the Netherlands
1

You collect state pension rights for each year living in the Netherlands

Everybody who lives in the Netherlands participates in the state pension scheme called AOW (except in some rare special cases). State benefits are not tied to your work and even if you do not work, you also accrue state pension rights. Contributions are mandatory for Dutch residents, including both employed and self-employed workers. This also applies to expats working in the Netherlands. The only limitation is that you need to contribute to the AOW scheme for at least one year in order to be eligible for a Dutch pension.

2

The Dutch retirement age is increasing with life expectancy

The retirement age in the Netherlands is currently 66 and four months. It is set to gradually increase to 67 until 2025. After that, the official retirement age is linked to future life expectancy. If the Dutch population is expected to live longer, the retirement age will increase further.

The retirement age in the Netherlands is high compared with other countries. The link to life expectancy helps make the pension system sustainable.


"Based on estimates for life expectancy from Statistics Netherlands, the Dutch retirement age will be 69 years for someone who is 35 years old today."


3

Dutch state retirement benefits are lower than in other European countries

Dutch state retirement benefits are designed to provide only a basic retirement income. This is different to, for instance, France or Germany, where the state pension depends on your income during your working life.

The Dutch state pension is linked to the minimum wage. Retirees living together with a partner each receive up to 50% of the minimum wage. Pensioners living alone receive up to 70% of the minimum wage. You will only receive the full pension amount if you stayed in the Netherland for 50 years prior to your retirement. For expats who spend time in different countries, the amount of Dutch state pension is likely to be even lower than the full amount.


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4

Workplace pension plans are an important part of total compensation in the Netherlands

Dutch state retirement benefits are designed to provide only a basic retirement income. This is different to, for instance, France or Germany, where the state pension depends on your income during your working life.

The Dutch state pension is linked to the minimum wage. Retirees living together with a partner each receive up to 50% of the minimum wage. Pensioners living alone receive up to 70% of the minimum wage. You will only receive the full pension amount if you stayed in the Netherland for 50 years prior to your retirement. For expats who spend time in different countries, the amount of Dutch state pension is likely to be even lower than the full amount.

Retired couple receiving their Dutch pension abroad.
5

Most workplace pension plans include survivors’ benefits to protect your family

In addition to retirement benefits, many workplace pension plans include partner's and orphans' benefits for your family. These plans offer financial protection to your family in case you die.

If you have such a plan, your partner is entitled to receive benefits for the rest of their life after your death. Any children you may have receive survivors’ benefits up to a certain age or until they have completed their education.

The specifics of the plans determine how much benefits are paid out. As a rule of thumb, the plans offer the best protection if you die while still working for your employer. Benefits are often much lower or even zero if you die after retirement or when you stop working in the Netherlands.

6

The Dutch government offers tax advantages for retirement savings plans

If you are self-employed (for instance as a sole proprietor or zzp’er in Dutch) you need to save for retirement on your own. The same holds true if your employer does not offer a pension plan.

The good news is that the Dutch government offers tax advantages to help you. Each year, you can save a part of your gross income (“Jaarruimte” in Dutch) tax free in certain pension products. These products are designed to provide you with additional retirement income. You do have to pay taxes once you receive this pension income.

7

Whether you can fully claim your Dutch pension depends on the country in which you retire

If you retire in another country in the European Union, you are eligible to receive the Dutch state benefits that you have accrued during your life in the Netherlands.

For other countries, Dutch state benefits are paid out, if the country in which you retire has a social security treaty with the Netherlands. The countries with such a treaty are indicated in green in the map below; for yellow countries some special conditions apply.

Figure, showing countries in which you can receive your Dutch state retirement benefits.
Countries in which you can receive your Dutch state retirement benefits

It is generally also possible to receive your workplace pensions outside the Netherlands. The taxation of retirement income from the Netherlands depends on the tax treaty between the Netherlands and the country in which you retire.

8

Dutch state benefits and your workplace pension might not be sufficient for a worry-free retirement

Many Dutch workplace pension funds have not performed well in the last decade and the real value of Dutch workplace pensions has declined by as much as 15%. Thus, even if you have a workplace pension, additional savings are often necessary to maintain your standard of living in retirement.

This is particularly true for expats whose pension is often lower because they did not contribute to Dutch pension plans throughout their working life.

Therefore, it is important to get a realistic picture and stay informed about your pension and plan your financial future accordingly. It is never too late to take action but the earlier you do so, the more time you have to make necessary adjustments and to plan for a worry-free retirement.

Want to know more about your Dutch pension?

If you would like to know more about your financial future, we offer a personalized Dutch pension report that presents all relevant information about your pension plans, the financial situation of your pension providers, what happens if you move abroad, and much more. The report is written entirely in English and contains information that is particularly relevant for expats.

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Learn more about your Dutch pensions

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