Networking Review: Pensions for ZZP-ers

by Nancy Mayer

According to Eelco Zweerts de Jong, from ZJHT, Zweerts de Jong & Heerkens Thijssen, Meesters in Verzekeringen, our speaker on June 22nd, we should all be thinking about our pension plan. As ZZP-ers, or sole entrepeneurs, we can’t count on an employer to set up a pension fund for us, so we have to do it ourselves. These plans also apply to us if we eventually have employees.

The age of retirement keeps going up, which at the moment is 68, and eventually will go up to 70.

What are our options?

In the Netherlands, we have two options: the traditional pension plan, and the blocked savings account. (The third option is to simply have a savings account.)

Option 1: The Traditional Pension Plan

The pros of this plan are:
1. A Reliable Partner
2. Fiscal Friendly
3. Stock investing is possible through an insurance company.
4. Life-long monthly payouts.
5. No maximum monthly payouts.
6. Government Guarantees: They will make sure that all obligations will be filled in case of bankruptcy of insurance company.

The cons of this plan are:
1. Once the premium is set, you are obliged to pay it.
2. Higher administration costs.
3. Premium is set by insurance company. Part of this premium will be administration costs or cover for your partner. Start costs (high) will apply.
4. Maximum fiscally allowed deposit: € 12,598,-.
5. When you die, payouts will stop.

Option 2: The Blocked Savings Account

The pros of this plan are:
1. Reliable Partner
2. Fiscal Friendly
3. Deposit: in good years you can deposit and in lesser years you can skip a deposit.
4. Lower administration costs.
5. Full Deposit will be deposited in your account. Only start costs (low) will apply.
6. Minimum 5 years, maximum 20 years payout.
7. When you die: payouts will continue to your heirs.

The cons of this plan are:
1. Self-discipline is necessary to make payments.
2. Maximum fiscally allowed deposit is €12,598,-.
3. This is an interest account. The interest at the moment is very low.
4. If you start payouts before official pension age. Minimum duration payouts are 20 years.
5. Maximum monthly payouts of €1,776,- if payout period is less than 20 years.
6. Government Guarantees: The savings will fall under the Deposit Guarantee System, which means a maximum of €100,000.- is guaranteed in case of bankruptcy.

In this blocked savings account, you are allowed to invest this money in stocks, but first you must pass a test to prove that you know what you’re doing, so that they’re not liable if you lose all your money!

There is a hefty penalty if you want to take your money out before you turn 68, which is 52% (the highest tax rate), plus a 20% penalty, which comes to a whopping 72%.

The good news is that income taxes lower at age 68, to 26%, except for people in the highest tax bracket of 52%.

Your choice for being payed out for your pension is between 5 years and 20 years., so that the maximum age to receive your pension is 88.

Questions flew; conversation animated

There were a lot of questions about receiving pensions if you move away from the Netherlands. If you are an EU citizen, there is no problem, and you will receive your pension. If you are a non-EU citizen, there are many countries with tax treaties that will ensure your right to receive your money. How you get your pension will depend upon which country you’re living in. Once you’re living outside the country when you’re 68, you have to apply to get your pension. The Dutch government will not chase after you to give you your pension! How you’re taxed on the pension money will lie somewhere between the taxes of the country where you’re living and the taxes of the Netherlands. If you move away from the Netherlands 10 years or more before you die, your spouse will not have to pay tax upon your death.

There were also questions about inheritance tax, which is 20%. It’s possible to make a one- time gift to your child of €100,000,- as long as your child is under the age of 35, and the money goes into that child’s house (to buy or renovate it), which is his/her primary residence.

There is a website to figure out pension plans: berekenhet.nl

In conclusion

It was a very insightful evening, and there was a lot of conversation about pensions and planning. Personally, it was all new information to me, and I was very glad to have the opportunity to find out about pension plans in the Netherlands. Eelco will be very happy to help anyone who would like more information, or who is ready to open up a pension fund.

ZJHT
Zweerts de Jong & Heerkens Thijssen
Meesters in Verzekeringen
Villa Maarheeze
Rijkstraatweg 675
2245 CB Wassenaar
mail@zjht.nl
www.zjht.nl

 


Nancy Mayer, a WBII member, is a professional singer and voice teacher working from The Hague, the Netherlands. 

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