Retirement

28 May 2021

And you, where do you see yourself in 15 years?

Fewer than half of all Belgians think they’ve built up enough of a financial reserve for their pension.

Retirement is often thought of as a blessed time when you will finally have time to indulge in your favorite hobbies, without any constraints. But to be able to achieve your dreams, you have to be well prepared. A certain financial comfort is necessary to be able to benefit from it. However, there are more and more people who have to help both their elderly parents and their own children while continuing to work. This pivotal generation, commonly referred to as the "sandwich generation", is made up of individuals between the ages of forty and sixty. So how do you put money aside and plan for retirement under these conditions?

Hotel Mum & Dad

Unless you encountered setbacks on your journey, these are the years in which you would normally be earning a bit more and your budget starts to get a bit bigger. However: the time when children flew the nest as soon as they could seems to be over. Hotel Mum & Dad is more popular than ever. That is partly because for twentysomethings (and thirtysomethings) it is increasingly difficult to buy a home, or to secure a permanent employment contract. However sweet those young adults are, they still cost a significant amount of money. Moreover, some twenty- and thirty-year-olds rely on their parents to contribute towards financing their first home.

That would not be so bad if the current generation of forty- and fifty-year-olds were about to retire right now and could enjoy the social security that they have been contributing to for years. But the level of the statutory pension that they will receive when they take retirement is more uncertain than ever. Due to the ageing population, the State pension is threatened to become proportionally lower than it was for previous generations.

The 3 statutory pension warning lights

1. The number of pensioners will increase in coming years. The number of pensioners (67+ years) in comparison to the total Belgian population:

  • 2020: 16.9%
  • 2040: 22.3%

2. Theworking-aged population is shrinking. Working-aged Belgians (18 to 66 years) per pensioner (67+ years):

  • 2020: 3.7 working-aged persons per pensioner
  • 2040: 2.6 working-aged persons per pensioner

3. Life expectancy is rising. On average, we will be retired for longer:

  • 2000: to 80.9 years for women - 74.6 years for men
  • 2020: to 84.2 years for women - 79.8 years for men

Source: Federal Planning Bureau, Statbel

You may have already reflected on the fact that the statutory pension will not be sufficient for you to live as comfortably as you do now. And perhaps you have, like hundreds of thousands of other Belgians, started a pension saving so that you will be able to begin your retirement with a head start.

Perhaps you are already putting a bit aside already, or have in previous years started investing because savings accounts generate almost no return. That’s a smart move, because the earlier you start, the higher your potential return can be.

What do Belgians think about their pensions?

  • Among Belgians who have not yet retired, 40% believe that they won’t be able to maintain the standard of living they had when they were working.
  • A larger percentage, 45% of Belgians between the ages of 35 and 49, think that they will have to earn some extra money during their retirement.
  • And 59% of 35 to 49-year-olds are no longer expecting to receive a government pension when they reach retirement age.
  • Belgians hope to retire at around 62 years of age, while the statutory pension age in 2030 will be 67 years of age.

Source: ING International Survey, 2019 - National Pension Study by NN, 2019

How much money do you need for your pension?

The average pensioner spends about 1,700 euros per month. That amount includes all expenses on goods and services.

You don’t want to have to watch every eurocent once you have taken retirement. That is not why you worked your whole life. Perhaps there are hobbies you want to pick up. Maybe there is still a large part of the world you want to explore. Or maybe you are daydreaming about a sports car, sailboat or a second home in a sunny climate. That is why it’s good to do some financial planning. An ING adviser can help you with just that.

Isn’t it time to take charge of your future?