Will I receive enough pension?

When you work for an employer, you probably build up a pension. In fact, many employers require you to participate in a pension scheme. Many people have a scheme without really knowing how it works. Suppose you are going to start a new job, what should you expect from a new employer? How do you know if you are building up enough pension for your old age? In this blog, we answer these questions and give you insight into what you can expect.

What is an average pension?

It is difficult to give an exact amount, because pensions can vary greatly. Pension accrual is often based on a percentage of your gross salary, usually between 14% and 20%. Since this is a percentage of your salary, it differs for everyone. If you are close to these percentages, you know that your pension scheme is at least average. Important to note is, however, that 50% of people do not build up enough pension to have the lifestyle they currently have after they turn 68. An 'average' pension will therefore not be sufficient for many people.

Recent figures from Dutch National Bureau of Statistics (CBS, 2024) showed that in 2022, 1 in 3 employers still does not offer a pension. If your employer does not have a pension scheme, you can negotiate a higher salary to save for your pension in the third pillar. For example, you can negotiate a salary increase of 14% to compensate for this difference.

Is my pension sufficient?

To determine whether your pension is sufficient, you need to know what you expect to spend when you retire. This is usually around the age of 68, when you will also receive AOW., which is the government pension. You can already include this AOW. The current AOW (as per 1 July 2024) per month is €1,486.24 net for single people, and €807.36 for cohabitants.

A rule of thumb is that you need approximately 80% of your last income during your retirement. Work-related costs are eliminated, such as travel expenses, but your lifestyle will probably remain the same. What are steps you can take to see if you are in a good position?

1. Check your current status on Mijn Pensioenoverzicht. Here you can also see how much you receive per month; compare this amount with your current situation and consider whether you think it is feasible

2. Also look at the tab "if things go economically well or bad". Here you can see what your pension will look like at the age of 68, corrected for inflation and in different economic scenarios

3. Understand the pension that your employer offers. You often have access to a pension portal, or talk to your employer

Not enough? No problem!

Does it turn out that it is not enough? Or are you afraid that you are not building up enough? Don't worry, because you often still have enough time to arrive at the right monthly amount for you. Here is a selection of the steps that you can still take:

• You can make additional contributions to your employer: Many people think that pension schemes are fixed, but often there are still some things that are flexible. For example, how much you can still contribute from your salary or how your pension money is invested.

• You can open your own pension account: You can do this at a bank or an insurance company. Take a look at this tool to calculate how much extra you could deposit per month. If you want to know what the benefits are, take a look at this post!

• Do you already have access to Equip? Then get in touch with one of our financial experts and create a personal pension plan. Together you can determine exactly how much you should put aside.

• Do you not yet have access to Equip? Then talk to your employer, or to us, about how we can help you with your financial future

Conclusion

It is important to have insight into your pension scheme and to know what you can expect from your employer. By asking the right questions and possibly negotiating your salary, you can ensure a financially healthy future. Use Mijn Pensioenoverzicht for a better picture, and contact us to see how we can help you, and all your colleagues, towards financial security.