How much pension do I need as a self-employed (zzp) professional in the Netherlands?

As a self-employed individual in the Netherlands, you have already navigated the administrative processes necessary to register yourself as a ‘zelfstandig zonder personeel’ with the KvK (Dutch Chamber of Commerce). Now you have the freedom to choose your own path, but with that freedom comes responsibility! One of the most crucial being building your pension as a freelancer. Unlike employees who receive pension contributions from their employer, you're responsible for your own pension savings.

It's important that everyone takes action to ensure they have enough money to live comfortably later in life, but how much pension do you actually need as a self-employed professional in the Netherlands? How do you save or invest in the right way for your retirement, taking into account the ways in which the Dutch system works? In this article, we break it all down for you.

Why is pension building important for the self-employed?

As a self-employed person, you might be puting off sorting out your pension until later. However, the earlier you start, the more you can accumulate over time. Unfortunately, the pension you need as a self-employed professional won’t magically appear. You don’t have an employer contributing on your behalf, so you’ll need to arrange it yourself.

As someone living and working in the Netherlands, you are still entitled to the basic state pension (AOW in the Netherlands), but this government-provided income is often not enough for a comfortable lifestyle.

How much pension do you need as a self-employed professional (zzp’er)?

How much pension do you actually need as a zzp'er in the Netherlands? There isn’t a one-size-fits-all answer to this question, as it depends on your personal situation. However, there are general rules of thumb to follow.

Many experts recommend that you’ll need approximately 70% to 80% of your current income to live comfortably after retirement. So, if you currently earn €40,000 per year, you’ll need around €28,000 to €32,000 annually after retirement. This includes the state pension (AOW), so you won’t need to save or invest the entire amount yourself.

One useful way to calculate this is by reviewing your current monthly expenses. Multiply this by 12 to estimate your annual costs. Take into account changes in your lifestyle and possible higher or lower expenses post-retirement (for example, no more mortgage payments, but potentially higher healthcare costs).

Example:

• Current annual income: €40,000
• Recommended pension amount: 70% of €40,000 = €28,000 per year
• AOW contribution: around €15,000 per year (if you're single)

This means you’ll need to cover €13,000 per year from your own pension savings.

Other things to know when calculating your pension as a self-employed person

When calculating your pension as a self-employed professional, consider two important factors:

1. Inflation: Prices rise every year, so factor in inflation in your calculations. This can significantly impact your future spending.
2. Life expectancy: People are living longer, which means your pension might need to last longer than you initially expect.

It might be wise to consult a financial advisor to help you accurately calculate your pension, especially if you're uncertain about the steps involved.

Options for building your pension as a self-employed (zzp'er) professional in the Netherlands

Now that you know how much you need to save or invest, the next question is: how do you build that amount?

1. Saving or investing on your own You can choose to set aside money yourself, for example, in a savings account or through investments. While investing can yield higher returns than savings, it also carries more risk. Make sure you are well-informed before starting.
2. Pension products like annuities Another option is to take out an annuity with a bank or insurer. This is a pension product where you periodically contribute and receive a payout later. The benefit of this is that you can take advantage of tax incentives, such as annuity deductions. This means that your contributions can be deducted from your taxable income, reducing the amount of tax you pay.

Tax advantages for the self-employed when building a Dutch pension

As a self-employed individual, you can benefit from tax advantages when building your pension. In addition to the annuity deduction, there are other perks:

1. Annuity deduction: Each year, you can contribute a tax-free amount to an annuity product. This amount is based on your annual space or reservation space. The money you contribute before December 31st can be deducted from your income tax declaration in box 1. As a result, your taxable income decreases, and you may get a portion of your tax back.
2. No capital gains tax: You won’t pay capital gains tax on the money invested in an annuity.
3. Lower tax rates upon retirement: Once you reach retirement age, the money you’ve built up will be paid out to you monthly or annually. You will have to pay income tax on this amount, but often at a lower rate – exceptions apply.

This is based on the 2024 tax regulations. Check the website of the Tax and Customs Administration (Belastingdienst) to see the latest conditions. In this article, we've summarised the tax benefits for you.

Keep in mind that your tax advantages depend on your personal situation. If you need advice, consult a legal or tax expert.

When should you start saving for your pension?

The short answer: as soon as possible. The earlier you start, the better your pension will look in the end. Thanks to the effect of compound interest, your pension savings grow faster when you start early. Even modest amounts set aside regularly can make a big difference in the long run.

Action plan for self-employed professionals to secure their pension in the Netherlands

Now that you have a clear picture of how much pension you need and how to build it, it’s time to take action. Here’s a simple step-by-step plan:

1. Calculate how much pension you need: Use our Annual Margin tool to estimate a realistic amount.
2. Choose a pension-building method: Decide whether you will save, invest, or use a pension product like an annuity.
3. Take advantage of tax benefits: Make sure you benefit from options like the annuity deduction.
4. Set aside money regularly: Start saving or investing as early as possible, even if it’s just a small amount per month.

The Peaks ZZP Pension account: build your pension the easy way

Looking for an accessible annuity product? The Peaks ZZP Pension account makes building a pension as a self-employed professional simple. With this account, you invest your pension savings, but you hardly need to lift a finger.

By investing in the Peaks Pension Account, you can take advantage of tax benefits. However, keep in mind that you can’t withdraw money from an annuity. 

Note: Investing always involves risk. You stand to lose (part of) your invested money.