In the years in which you have saved for your retirement, you have enjoyed an annual tax relief. When you reach 60, it’s time to pay a one-off tax on long-term savings.
Please note: If you only opened your retirement savings fund from the age of 55, the tax will be levied 10 years after you signed your contract.
With retirement savings funds, the tax on long-term savings is calculated on the total deposits into the retirement savings account (= taxable amount). For this, the government assumes a notional return of:
If your actual yield is higher than what the government has estimated, then you’re in luck because you will not be taxed on the difference.
With pension-related savings-based insurance policies, the final tax is only calculated on the deposits at a guaranteed interest rate. What you may have accumulated via profit-sharing is not taxed in this case.
Have you been saving for your retirement since 2014 or earlier? Then you have already paid part of the final tax through anticipatory collections between 2015 and 2019. The contributions you paid in that period will ultimately be deducted from your final tax.
"}},{"componentType":"sectionTitle","title":"What happens after the final tax?"},{"componentType":"paragraph","richBody":{"value":"After your 60th birthday, when the final tax has been levied on your retirement savings plan, it still makes sense to continue saving for your retirement.
You can continue to save up until the year in which you turn 64. That’s a total of 5 years in which you can save tax-free and also continue to benefit from the annual (25% or 30%) tax relief.
"}},{"componentType":"sectionTitle","title":"Did you only start saving for your retirement from the age of 55?"},{"componentType":"paragraph","richBody":{"value":"Whether you start sooner or later, it will still make sense to save for your retirement up to and including the year in which you turn 64, so that’s even if you start from the age of 55. In such a scenario, the 8% final tax will not be levied when you turn 60, but 10 years after you sign your contract. If, for example, you started at 57, the tax will be levied at the age of 67.
Please note that the tax treatment of your investments and capital depends on your personal situation and that the criteria used may change in the future. The criteria applying to long-term savings are different from those applying to retirement savings.
"}}]},"hasMacro":false,"id":"98bc95e1-a37a-495f-bef8-29fafc618a85","localeString":"en-GB","mainHeaderZone":{"backLink":{"textLink":{"text":"Pension savings","url":"/en/individuals/pension"}},"componentType":"editorialHeader","coreHeader":{"body":"60 years of age... It won’t be long now before you can enjoy your retirement. If you have been saving for your retirement for a while, you will now also reach a new milestone: the final tax.","headerImage":{"extension":"jpg","original":"https://assets.ing.com/m/3ac35441858dd1d/original/MSFGA_60yo.jpg","transformBaseUrl":"https://assets.ing.com/transform/537f957a-9209-4d7e-863f-c4de4abb0647/MSFGA_60yo","type":"image","width":1416},"subtitle":"When you save for your retirement, in principle you will pay a one-off final tax of 8% later on. Read all about this below.","title":"The final tax on your retirement savings fund"},"date":"2024-01-15","readingTime":0},"publishDate":"2024-01-12T15:09:04.772+01:00"}}