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What does this choice mean for your pension? Calculate it using the pension planner.
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You choose not only when to retire, but also how you want to divide your pension. Do you expect to need more income during the first few years of your retirement? For example, because you want to pay off a mortgage, or because you have plans that require you to have more money temporarily? In that case, you can opt for a higher pension at first, followed by a lower pension: a high-low pension.
What does it mean to receive a higher pension at first?
A temporary increase in your pension until you reach state pension age:
- Do you wish to retire before you reach state pension age? You may choose to receive a higher pension on a temporary basis in the period leading up to your state pension.
- You will receive the higher pension from your retirement date until the first day of the month in which you reach state pension age.
- After that you will receive a lower pension.
A temporary increase in your pension from state pension age
- Does your pension commence on or after your state pension age? In that case, you can choose to receive a higher pension at first.
- After that you will receive a lower pension.
- The period during which you receive a higher pension lasts for a minimum of 1 month and a maximum of 10 years.
- This choice will affect how your pension is spread out over time. Your total pension will not change.
Is this the right choice for me?
This option may be suitable if you expect to need more income during the first few years of your retirement. For example, because you want to travel or you have other plans that require you to have extra money temporarily, such as paying off a mortgage. You can make this choice when you retire.
Consider, for example, the following issues:
- Does a higher pension now and a lower pension later fit in with your plans for the future?
- Do you expect your expenditure to be higher in the first few years of your retirement than later on?
- What are your plans for the future, and what level of income would suit those plans?
- What will your income be like when you receive the state pension?
- Do you have any other sources of income?
Thinking this through will give you a better idea of what this choice means for you.
What will change if I choose to receive a higher pension at first?
Your income
During the initial period you will receive a higher pension. After that your pension will be lower. You will receive that lower pension for the rest of your life.
This option may be suitable if you want to have extra financial leeway at the start of your retirement. You should therefore consider not only your current income, but also your future income. What will your financial situation be like once the higher period has ended?
Your partner’s income
The amount of your own pension changes under the high-low pension. You should therefore consider your combined income during the period when you receive a higher pension at first and later a lower one. What does this mean for your overall financial situation as a couple? You should also bear in mind what arrangements have been made for your partner should you pass away.
Your expenditure
Once you retire, your expenditure often changes too. The expenses you used to incur for your work are no longer an issue, and you spend your free time doing other things. Your fixed costs and personal expenses may also change. Think about how much money you’ll need in the future and what you want to spend it on. The Nibud Pensioenschijf-van-vijf can help with this.
Tax and allowances
A higher pension during the initial period may affect the tax you pay and any allowances you receive.
During the period in which you receive a higher pension, your taxable pension income will be higher. As a result, you may end up paying more tax. A higher income may also affect allowances, such as rent allowance or healthcare allowance.
Do you want to retire before your state pension age? If so, you should also look into the transition to your state pension. Your income will then change again. It is therefore important to look not only at the initial period, but also at your income both before and after you reach state pension age. You can find more information on the website of the Dutch Tax and Customs Administration.
What other options do I have?
You can combine several pension options. In the pension planner, you can see what this means for your pension.
Are you opting for early retirement? If so, you can combine this with that option. This will help you ensure a smoother transition between your income before and after you reach state pension age.
You cannot combine the high-low option with the lump sum pension option if this option becomes available from 1 January 2029.
What does Bpf Koopvaardij arrange?
We will send you information about your pension before you reach state pension age. You can then decide for yourself whether and when you wish to have your pension commence and how you wish to divide it.
Have you applied for your pension? We will then calculate your pension based on the choices you have made. You will receive a confirmation of the amounts within 3 weeks.
How do I apply for a pension?
You apply for your pension yourself. You can do this in My Koopvaardij. In the step-by-step guide to applying for a pension , you can find out how to apply for your pension. Apply for your pension no later than 2 months before you wish it to commence.
Remember: once your pension commences, your choices are final. You will therefore no longer be able to change these choices.
Do you have a partner? If so, bear in mind that he or she will also need to sign your pension application (digitally or otherwise).
What happens if I do nothing?
You will receive a message from us 6 months before your state pension age inviting you to apply for your pension. Your pension does not commence automatically. If you apply for your pension later, you will receive your pension later too. You must apply for your pension no later than 2 months before you wish it to commence.
Do you need help?
Do you have any questions or would you like more information? If so, contact us.