What is additional saving?
Additional saving is voluntarily contributing extra premiums each month for a higher pension. If you choose this option, your extra premium for the Zwitserleven Pensioen is invested in the same way as the premium that your employer contributes for you. On your participant portal you can see how much you can save additional and what the effect is on your expected pension. The extra premium is deducted from your salary each month. So you pay this premium yourself. The extra premium is invested until your retirement date and used on your retirement date to purchase a lifelong pension.
The government has determined through tax regulations how much money you can save each month for your pension. If the premium that your employer contributes for you is less than this maximum, there is room to save additionally.
Which form of additional saving is available to you depends on the agreements your employer has made with us. You can find these agreements in the pension regulations. In the participant portal we only show the choices you can make. It is possible that your employer has not agreed additional saving with us. If this is the case, you cannot save additionally.
With the Zwitserleven Pensioen we have several forms of additional saving:
Save as a fixed monthly amount
In this case, you choose the monthly amount you want to add to your savings. This amount does not change. If your income changes, or you start working more or less, this has no effect on the amount you save. Unless a change causes the additional savings amount to exceed the amount allowed by the government. In that case, we reduce the additional savings amount to the maximum amount that is allowed.
Additional saving as a fixed percentage of the space to save additionally
In this case, you choose the percentage of the space available that you want to save additional. We indicate on the member portal what this means as a monthly amount. This amount may change later. If your income changes, or if you work more or less, the monthly amount you save extra will change.
Who is additional saving for?
Additional saving can be useful if the expected total income you receive after retirement is less than the income you expect to need after retirement. To assess this, examine the following:
A. The total income you will receive after retirement.
This income can consist of:
- AOW, everyone who lives or works in the Netherlands receives a benefit from the government. For more information, go to the SVB website.
- Pension that you accrue with Zwitserleven through your current employer.
- Pension that you have accrued with any previous employers.
- Annuities or bank savings.
- Savings or investments.
- Work, if you choose to continue working after retirement.
On the participant portal you can enter the pension you’ve accrued with previous employers in the Inventory section. It is also possible to enter your own resources such as savings.
Also check on mijnpensioenoverzicht.nl how much pension income you expect and how much your partner, if any, will receive.
B. The income you will need after retirement.
For example expenses for your home (rent or mortgage), household expenses, transportation (car or public transportation), energy, insurance, leisure and vacation.
On the participant portal you can enter your own expenses in the Inventory section. It is also possible to start from sample amounts from the Nibud.
If you examine both parts (A: income you receive and B: income you need), you get a good estimate of your own situation. And you can assess whether or not you need to save for your retirement.
More useful information can be found on the website: Rondkomen na pensionering | Nibud
When is additional saving for extra retirement pension suitable?
There are advantages and disadvantages to additional saving for retirement. Whether it suits you depends on what you consider important. And on your financial situation, now and in the future. First do the research as explained in the section “Who is additional saving for?”
Pros
- You accrue extra pension income for later.
- You can supplement a pension that is too low.
- The premium you pay is deducted from your salary. You pay no tax on the premium.
- You pay no tax on the accrued pension value.
- You are free to adjust or stop your additional premium at any time.
- If you die before your retirement date, more money is available for a partner’s pension and/or orphan’s pension.
- Your extra premium is invested just like the premium your employer deposits for you. This gives you a chance on more returns.
Cons
- Less salary remains when you contribute extra premium for additional saving.
- The money is available after you retire. You can’t use this money now.
- You’ve had tax benefits when saving for retirement. However, the pension payout is taxed. This disadvantage may be higher than the benefit you had before.
- You can’t save anymore when you retire.
- The amount of pension you will receive from the retirement date is not certain yet. The pension is not purchased until the retirement date. The amount of your pension depends on the value of your investments, the interest rate and the rate the insurer uses at that time.
- If you get divorced, part of the accrued pension is for your ex-partner. This also applies to the accrued pension through additional saving.
- Because your additional premium is invested just like your current pension premium, you run the risk of a lower return. Or that you may even end up with less than you invested.
Suitable:
- If you don’t expect to get enough income after retirement.
- If you have money left over at the end of the month or can easily spare to save.
- If you automatically want to use part of your gross salary for extra contributions to your pension.
Not suitable:
- If you expect to have enough income after retirement.
- If you are (often) short of money at the end of the month.
- If you prefer to save for your income after retirement in another way.
- If you would rather use the money you would save now.
What are the alternatives?
You can also save for your future in other ways by:
- Saving money in a savings account at a bank.
- Investing money with a bank or insurance company.
- Taking out an annuity with a bank or insurance company.
These alternatives are independent of your employer. You can choose from several products and providers. You also have more freedom in your choice of how the money is paid out. Be aware that in some cases you have a tax advantage and in others you do not. It is also important to pay attention to the fees charged by the provider. The fees for this type of product are often higher than the fees Zwitserleven charges for additional savings.
You could also choose to (partially) pay off your mortgage and/or debts as applicable.
How do you arrange additional saving for extra retirement pension?
On your participant portal you can indicate in the Pension Planner section whether you want to save additionally. The options shown are tailored to the options your employer has included in your pension plan.
If you don’t indicate anything on your member portal, you don’t participate in additional saving. In some cases, however, your employer has agreed with us that a standard amount will be additionally saved. If so, you can see this on your member portal.
If you choose to voluntarily contribute an additional amount, this amount will be deducted from your salary each month by your employer. You can change the amount at any time. And also stop it.
When does additional saving stop automatically?
If you have chosen to save additional with Zwitserleven, it stops automatically in the following cases:
- We receive a notification that you have left your employment with your employer; or
- You retire from Zwitserleven
How do you stop saving?
You can stop saving additionally via the participant portal at any time. You do this by passing on the change in the Pension Planner section. If you want to start saving again later, you can inform us in the same way.
Need advice?
We are pleased to assist you with your retirement choices. Those choices can have major financial implications. Our guidance is only about your Zwitserleven Pensioen. Whether a choice is right for you naturally depends on your entire personal situation. Now and in the future. Have you thought about asking an advisor? They can give you an overview of all your financial affairs. And help you make the most appropriate choices.