Many expats are attracted to retiring with a pension in the Netherlands for its high standard of living, good healthcare, and quality of life. However, the key to a comfortable retirement is planning, and with retirement abroad, it’s even more important you are well-prepared.
This guide to the Dutch pension system explains how pensions in the Netherlands work. It includes advice on the following:
- The Dutch pension system
- Who is eligible for pensions in the Netherlands?
- Pension age in the Netherlands
- Who can claim a state pension in the Netherlands?
- What happens if you are not eligible for a full pension?
- Pensions in the Netherlands for expats
- Transferring your pension to the Netherlands
- Transferring your pension using QROPS
- Dutch pension rates and contributions
- The Dutch state pension
- Workplace pensions in the Netherlands
- Private pensions in the Netherlands
- Other pensions in the Netherlands
- Survivor’s pension
- Applying for your Dutch pension
- Getting pension advice
- Useful resources
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The Dutch pension system
The Netherlands is one of the best places in the world for retirees, with a robust and sustainable pension system that provides good income to the country’s elderly population.
Around 30% of Dutch residents are over the age of 65, compared to an average of 28% across the 37 OECD countries. Life expectancy is 82, slightly above the overall average of 81.
The Netherlands ranked as the fifth-best place to retire on the Nataxis 2020 Global Retirement Index, based on health, finances, quality of life, and material wellbeing, rising from 10th place in 2019. The Dutch pension system topped the table in Mercer’s 2020 Global Pensions Index, with high ratings for adequacy, sustainability, and integrity.
The Dutch pension system has three pillars: state, workplace, and private pensions. The Sociale Verzekeringsbank (SVB) administers state pensions under the terms of the General Old Age Pensions Act (Algemene Ouderdomswet, or AOW). The state pension is commonly referred to as the AOW.
Dutch pension funds held $1.7 trillion of assets in 2019, behind only the United States, United Kingdom, and Australia. Total pension fund assets were 191% of GDP, more than any other OECD nation.
Who is eligible for pensions in the Netherlands?
Pension age in the Netherlands
The Dutch state pension age in 2020 is 66 and four months, having risen from 65 in 2018. It will rise to 67 in 2024.
The date you receive your Dutch pension depends on when you were born. The SVB offers a Dutch pension age calculator to find your individual retirement age.
It’s possible to retire early in the Netherlands, but you’ll typically need to finance this yourself, as you won’t receive your full state pension until you reach official Dutch pension age. You may also be eligible for bridging benefits (vergelijkbare uitkering or VUT) if you meet the SVB’s conditions.
It’s also possible to work beyond your standard retirement age to build up a bigger pension if you so desire.
Who can claim a state pension in the Netherlands?
For each year you live or work in the Netherlands, you build 2% towards your state pension. To receive the full pension (100%), you must have 50 years of contributions. If you don’t have the full allocation, your pension is calculated based on the number of years you contributed.
If you move outside the Netherlands, this can reduce your pension amount/ Individuals aged between 15 and 65 can lose 2% of their Dutch pension for every year they haven’t lived in the Netherlands.
In some circumstances, foreigners working abroad can still benefit from the Dutch pension system. For example, some expats choose to take out voluntary state pension insurance within 12 months of moving abroad.
What happens if you are not eligible for a full pension?
If you’re not eligible for a full AOW state pension, you may still be able to apply for an AIO supplement.
The AIO is a supplement that can bring your income up to the level of the Dutch guaranteed minimum income. To qualify, you’ll need to be of pension age, live in the Netherlands, be unable to get a full state pension, and have little or no other income or assets.
The maximum AIO supplement in 2020 is €1,250.05 a month for residents who live on their own. If you live with your partner and you both need an AIO supplement, you can collectively receive €1,526.54 a month. If your partner does not require a supplement, you could be eligible for up to €763.27 a month. You can find out even more about eligibility on the SVB website.
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Pensions in the Netherlands for expats
The Netherlands is a member of the European Union (EU) and the Schengen Area. This means citizens from the EU, European Economic Area (EEA), or Switzerland can legally reside, work, and retire without a visa.
Non-EU nationals will typically require a Dutch visa. After five consecutive years of living in the Netherlands, you will be able to apply for a permanent residence permit.
Transferring your pension to the Netherlands
EU/EEA and Swiss nationals are able to combine state pensions earned in other member countries to count towards their Dutch pension. You can do this by notifying the pension office in the country you currently reside in. It will then calculate a pro-rata pension allowance from each country. The EU provides an explanation on its website.
The Netherlands has various bilateral social security agreements with other countries that allow foreign citizens to transfer international pension funds to retire to the Netherlands.
These agreements alleviate the tax implications of transferring pension funds, such as double taxation (where you must pay tax in your country of residence and nationality).
The countries that have bilateral social security agreements with the Netherlands are:
- Argentina
- Australia
- Belize
- Bosnia and Herzegovina
- Cabo Verde
- Canada
- Channel Islands
- Chile
- Ecuador
- Egypt
- Hong Kong
- India
- Indonesia
- Israel (excluding East Jerusalem, Golan, the Gaza Strip, the West Bank)
- Japan
- Jordan
- Kosovo
- Mali
- Monaco
- Montenegro
- Morocco
- North Macedonia
- New Zealand
- Panama
- Paraguay
- Philippines
- Serbia
- South Africa
- South Korea
- Suriname
- Thailand
- Tunisia
- Türkiye
- United States
- Uruguay
If you live outside the Netherlands, certain nationals can transfer their Dutch pension abroad; you can also check if this is possible for your country of residence using the SVB’s tool. In some cases, residents moving out of the Netherlands can claim remigration benefits to cover monthly living expenses.
Transferring your pension using QROPS
In some cases, offshore options such as the Qualifying Recognised Overseas Pension Scheme (QROPS) for UK pensions can help you avoid certain tax implications when transferring your pension.
Expats moving abroad from the UK may be able to transfer their pensions into a QROPS. This allows expats to consolidate their pensions into one plan, helping them manage their retirement funds more easilyand avoid currency fluctuations.
There are many advantages to QROPS but they are not suitable or available to all UK pensioners, so we recommend you take advice from an expert financial adviser.
Dutch pension rates and contributions
There are three pillars to the Dutch pension system:
- The Dutch state pension (AOW) makes up the first pillar. All residents make tax and social security contributions.
- Occupational/company pensions funded by employer and employee contributions form the second pillar.
- Private pension schemes (annuities) funded by voluntary personal contributions make up the third pillar.
Your Dutch pension fund is calculated based on your social security contributions, employer and employee contributions from occupational pensions, and optional private pension schemes (if applicable).
The Dutch state pension
The Dutch state pension is funded by worker contributions, at a rate of 17.9% of salary.
Single pensioners entitled to the full state pension can receive a gross total of €1,270.67 in 2020 (70% of the net minimum wage), while married or cohabiting couples can receive €870.03 for (50% of net minimum wage).
This sum doesn’t take into account health insurance contributions of €69.19 (single) or €47.41 (couples), plus tax and national insurance contributions of €246.25 (single) or €169.92 (couples) if no tax exemptions apply. An additional holiday allowance of €69.19 gross per month (or €49.42 for couples) is also available. This is paid out in May.
Overall pension income in the Netherlands is subject to tax. Certain pensioners must also pay national insurance, while all must make health insurance contributions. Pensioners can gain beneficial tax rates, and the amount you pay will depend on your personal circumstances.
Find out more in our guide to Dutch income tax rates
Workplace pensions in the Netherlands
Around 90% of employers offer occupational pension schemes, which are typically handled by an external pension provider. Some occupations have mandatory schemes – for example, the ABP pension fund is required for those that work in the educational or government sectors.
Accordingly, labor-based pensions are additional to the AOW. Besides old-age pensions, private pension plans may also provide benefits for surviving relatives or benefits if you can’t work.
Company pensions take into account an AOW pension, so you won’t make contributions on your whole salary, but rather the AOW deductible part of it. The rates depend on the pension scheme you’re signed up to.
The most common occupational pension schemes are based on the average salary a worker has built up during their career. These schemes have almost entirely replaced final salary schemes.
Employee pensions must be held outside the company of the employer, either in an industry-wide Dutch pension fund, a company scheme or occupational scheme, or by a life insurer. This protects workers’ rights should the employer go bankrupt.
Private pensions in the Netherlands
Another way to supplement your pension is by making voluntary contributions to a private pension fund. Major banks and insurance companies typically offer private pensions.
Private pensions are popular with self-employed people and those who work in sectors without a collective scheme. They can also be useful for workers who want to supplement their state and workplace pensions with extra investments.
Contributions to a private pension fund are typically tax-deductible, though future pensions benefits will be taxed.
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Other pensions in the Netherlands
Survivor’s pension
If your partner dies, you may be entitled to access their Dutch pension fund, subject to a number of conditions. For example, you must not yet be of state pension age, and you must either have a child younger than 18 or be at least 45% disabled.These benefits are also available to children, ages 21 and younger, of deceased parents.
There are some exceptions to eligibility, such as an existing terminal illness.You can check if you are eligible for Dutchsurvivor benefits on the SVB website. Those who have no other income can receive fullsurvivor benefits, otherwise, other income may be partially or totally deducted from the benefits.
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Applying for your Dutch pension
You should be automatically enrolled for the state pension, but it’s useful to check that your contributions have been registered correctly from time to time. If you’d like to know how much state pension you’ve built up at any time, you can log-in to the SVB website using your DigiD to request a statement. If you don’t have a DigiD, then you can follow the steps online to apply.
In terms of claiming your pension, the SVB should contact you by post four months before you reach your pension age. If you are living in another country, you may need to contact the SVB yourself six months before you reach retirement age – the SVB provides a guide on its website.
Your employer should provide you with details of eligibility and the application process for your workplace pension.
Getting pension advice
It’s sensible to seek professional financial advice on your Dutch pension, especially if you’re looking to make further investments or combine or transfer pensions from your home country.
If you’d like to find a financial advisor in the Netherlands, check out our directory pages, which feature a range of national and local expat pension experts.
Useful resources
- SVB: advice on state pensions
- Pension age calculator
- AOW: the General Old Age Pensions Act
FAQs
How does the pension system work in the Netherlands? ›
The Dutch pension system combines a pay-as-you-go system, in which workers pay for retirees' benefits, and an individual investment system. In the individual investment system, groups and individuals make high-risk and low-risk investments to make up for the amount they receive from the state pension.
How much is the pension in the Netherlands? ›The statutory pension age is gradually increasing to 67 in 2021. Thereafter, the standard retirement age will be linked to gains in life expectancy. The basic pension benefit for a single person equalled EUR 1 173.33 per month in 2018. There is an addition holiday allowance of EUR 71.42 per person.
Why is the Dutch pension system considered to be one of the best in the world? ›The Dutch pension system
The Netherlands is one of the best places in the world for retirees, with a robust and sustainable pension system that provides good income to the country's elderly population. Around 30% of Dutch residents are over the age of 65, compared to an average of 28% across the 37 OECD countries.
A strong feature of the Dutch pension system is the combination of pay-as-you-go funding for the state pension ('AOW') as the first pillar, and capital funding for the occupational pension as the second pillar.
How many years do you have to work in Netherlands to get pension? ›You can build up a full AOW pension if you live and work in the Netherlands for 50 years before you reach your AOW pension age. If you work in the Netherlands but do not live here, you might still be entitled to 2% of the AOW pension for each year that you worked in the country.
How does an American retire in the Netherlands? ›After five years of legal residence in the Netherlands you can apply for a permanent residence permit which will also allow you to retire here. In either case you will need to produce the following: A valid passport. A valid residence permit.
What country pays the best pension? ›- Iceland.
- Netherlands.
- Denmark.
- Israel.
- Finland.
- Australia.
- Norway.
- Sweden.
National insurance premium
The employer's social security contribution is 12.86% of the employee's salary.
If you live and work outside the Netherlands, you are usually no longer insured under the AOW pension scheme. Instead of the AOW pension, you may be able to build up a pension in the country where you live or work.
Which country has the best pension in Europe? ›
- Best countries for pensions. Following Finland, the best countries for pensions are Poland and Sweden. ...
- Average retirement age. ...
- Highest pension contributions.
If you are covered under the Dutch system, you and your employer (if you are an employee) must pay Dutch social security taxes. If you are self-employed and reside in the United States or the Netherlands, you will generally be covered and taxed only by the country where you reside.
Is pension taxed in the Netherlands? ›If you receive more than €20,000 a year in pension, annuity and social insurance payments from the Netherlands, in most cases your pension will be taxed in the Netherlands. If you worked for the Dutch government, you will normally pay tax in the Netherlands on the pension you built up during that time.
How much does an employee contribute to pension in Netherlands? ›What is the pension contribution rate in the Netherlands? 2021. The contribution rate in 2021 for AOW is 17.9% of salary, paid by the employee. If an employer has a workplace pension, employees will contribute 4-7% of base salary.
What are the three pillars of the Dutch pension system? ›The first pillar is the state pension under the General Old Age Pensions Act (AOW). The second pillar is the pension that employees are required to build up through their employer. The third pillar consists of individual supplementary pension.
How much does the average employer pay for pension in Netherlands? ›You and your employer pay monthly pension contributions. You pay 8.00% and your employer pays 16.00%. In essence, the contribution is the price of your pension. For 2019, the premium is 24.00% of the pension base.
Can I live overseas and still get the pension? ›The full amount of age pension that a person is eligible for is payable while overseas for 26 weeks.
Can a retired US citizen move to the Netherlands? ›The Netherlands, like other European countries, is part of the Schengen Agreement, which means that American retirees are allowed visa-free entry into the Dutch country as tourists or for business purposes up to 90 days. If you plan on a longer residency, you will have to apply for a permit.
Do US citizens pay taxes in the Netherlands? ›This means that you will be subject to tax in the Netherlands on your worldwide income. You will also be liable for social security contributions and healthcare insurance contributions. A taxpayer identification number will be assigned to you by the tax authorities once you have registered as a resident.
Can a retiree move to the Netherlands? ›You need to have lived and worked in the Netherlands for five years before you can gain permanent residency. This goes for both EU/EFTA and third-country citizens. There are also exceptions to this. EU/EFTA citizens can apply for permanent residency if they have retired after living in the country for three years.
What is the highest pension in USA? ›
The maximum benefit depends on the age you retire. For example, if you retire at full retirement age in 2023, your maximum benefit would be $3,627. However, if you retire at age 62 in 2023, your maximum benefit would be $2,572. If you retire at age 70 in 2023, your maximum benefit would be $4,555.
What is a good pension in the US? ›According to AARP, a good retirement income is about 80 percent of your pre-tax income prior to leaving the workforce. This is because when you're no longer working, you won't be paying income tax or other job-related expenses.
Do Americans get a pension? ›State pension in the US
The US state pension, often referred to as Social Security, is divided into several categories: Old-Age Insurance: Retirement pension. Old-Age Survivors Insurance: Widow's and orphan's pension. Old-Age Survivors Disability Insurance: Disability pension.
Of course, these figures reflect the situation of people who have retirement accounts, though about a quarter of Americans don't. For those who do, 54% have employer-sponsored accounts and 48% having savings in non-retirement accounts. A smaller percentage (21%) have pensions.
Where does Netherlands rank in pension? ›European pension systems made up the majority of the top 10, with Netherlands ranking second with a score of 84.6 and Denmark in third with 82, both retaining their spots from last year's index. The index ranks counties based on their retirement income systems' adequacy, sustainability and integrity.
Which country has the lowest pension age? ›Current retirement ages (2020*)
The current retirement age is 65 years or over in most European countries where OECD data is available. Of the EU member states, Greece, Italy, Luxembourg and Slovenia have the lowest current retirement ages, with 62 years for both men and women.
| Cost | Amsterdam | The Hague |
|---|---|---|
| Renting 1 bedroom (per month) | $1,513 (USD) | $915 (USD) |
| Renting 3 bedrooms (per month) | $2,465 (USD) | $1,568 (USD) |
| Buying (per square foot) | $628 (USD) | $307 (USD) |
[Updated Jan. 26, 2023] Mandatory employee benefits in the Netherlands include general old-age pension, surviving dependent's pension, long-term care, child support, unemployment, work, and income protection, sick leave, and health insurance.
Is living in the Netherlands affordable? ›...
Housing.
The minimum retirement age for service retirement for most members is 50 years with five years of service credit. The more service credit you have, the higher your retirement benefits will be. There are three basic types of retirement: service, disability, and industrial disability.
Does the Netherlands have Social Security? ›
If you live or work in the Netherlands you are insured for social security benefits. There are certain schemes under which you can receive money if you have little or no income. If you live abroad there are some situations in which you may still be insured for social security benefits.
How do I claim my pension from the Netherlands? ›- the country where you live (they will send it on to us), or.
- the last country where you were covered by national insurance for old-age pension, medical costs and unemploymentgovernment.
- New Zealand. #1 in Comfortable Retirement Rankings. ...
- Switzerland. #2 in Comfortable Retirement Rankings. ...
- Spain. #3 in Comfortable Retirement Rankings. ...
- Portugal. #4 in Comfortable Retirement Rankings. ...
- Australia. #5 in Comfortable Retirement Rankings. ...
- Canada. #6 in Comfortable Retirement Rankings. ...
- Luxembourg. ...
- Italy.
You have to apply separately to each country for any benefits that you might be eligible for.
Which is the best country to settle after retirement? ›In order of top to bottom, the following top 10 countries to retire abroad include Portugal, Mexico, Panama, Ecuador, Costa Rica, Spain, Greece, France, Italy, and Thailand.
Can Americans move to the Netherlands? ›According to the Dutch immigration Law, a residence permit is necessary for US citizens who intend to live and work in the Netherlands. There are several types of residence permits in the Netherlands they can apply for.
Can a US citizen buy property in the Netherlands? ›There are no restrictions placed on foreigners and non-Dutch residents buying property.
How many Americans live in Netherlands? ›There are an estimated 35,000 Americans living in the Netherlands. The Netherlands is an exhilarating destination for Americans living abroad.
What is the maximum pensionable salary in Netherlands 2023? ›The salary (base plus variable pay minus AOW) taken into account has been capped at 128.810€ (2023) by the pension legislation. At retirement age, the accrued reserves are used to buy old age pension and/or partner pension (to maintain death cover after retirement age).
Which countries do not tax pensions? ›- Panama. Panama tops most lists of the best countries to retire in, and there are good reasons for that. ...
- Costa Rica. ...
- Portugal. ...
- Ecuador. ...
- Greece. ...
- Belize. ...
- Nicaragua. ...
- The Philippines.
Do expats pay taxes in Netherlands? ›
Whether you're a Dutch citizen or an expat, you are required to pay taxes if you earn money while living in the Netherlands.
How much is pension in Netherlands per month? ›The statutory pension age is gradually increasing to 67 in 2021. Thereafter, the standard retirement age will be linked to gains in life expectancy. The basic pension benefit for a single person equalled EUR 1 173.33 per month in 2018. There is an addition holiday allowance of EUR 71.42 per person.
Do employers have to pay pension Netherlands? ›You must also pay overdue pension contributions, which may have consequences for your private assets. In some cases, you may be exempted from participation. However, you still have to offer your employees a pension scheme.
Is pension fund mandatory in Netherlands? ›A sector pension fund is obligatory in many sectors. For instance if you are an employer in sectors such as the construction or finishing industries. This also applies if you work on a self-employed or freelance basis in these sectors.
How much Dutch pension will I get? ›The state or AOW pension (basispensioen) is paid from the age of 66 and provides basic benefit payments of up to 70 percent of the minimum net wage.
Which country has the best pension system? ›1 country with the best pension system in 2022: Iceland. Iceland was found to have a healthy mix of public and private sector pensions.
Can I retire to the Netherlands from the US? ›This means you will need to apply for a visa and residence permit before moving to the Netherlands. You need to have lived and worked in the Netherlands for five years before you can gain permanent residency. This goes for both EU/EFTA and third-country citizens.
Do you pay tax on pension in Netherlands? ›Public Pensions
Benefits are adjusted according to changes in the minimum wage and are subject to income tax. A full old-age pension is paid to those who have resided for 50 years in the Netherlands between the ages of 15 and 65.
The minimum total contributions under automatic enrolment have been set by the government. The current minimum total contribution will be 8% for most people. Your employer must contribute a minimum amount, in most cases this is 3%.
How much do I pay monthly for pension? ›An easy way of figuring out how much you should be paying into your pension is to take the age at which you start your pension and divide by two. So, for example, if you start paying into your pension at the age of 30, you divide by two which gives you 15.
What are the benefits of working in Netherlands? ›
- Health insurance. ...
- Pension. ...
- Vacation days. ...
- Additional annual leave. ...
- Paid relocation service. ...
- Extended paternity leave. ...
- Commuter allowance or bike. ...
- Career development allowance.
Where to live in the Netherlands on a budget. Amstelveen, Hilversum, and Zaandam are good options for people who want to save on living expenses while remaining close to Amsterdam. Those looking for more affordable housing closer to The Hague or Rotterdam can look into living in smaller cities like Delft or Gouda.