25 July 2019

Check list: How to prepare for your retirement

Many Belgians are eager to start their retirement. Others have some anxiety about all the free time ahead of them and prefer to keep working a bit longer. Whatever your plans or outlook:, this checklist will prepare you well for the future.

In Belgium, the State Pension age is currently set at 65 years of age. However, the most recent statistics from the OECD show that the average Belgian man stops working aged 61.3 years, and the average Belgian woman stops at 59.7 years of age.

No matter what age you take retirement at, keeping these five considerations in mind will ease the transition.

1. Find out how much pension you have already built up

When considering how to prepare for retirement, the key question is how high your monthly benefit will be. In Belgium, the current average State Pension is approximately €1,100 for employees, while self-employed people receive around €900. Your pension amount depends on:

  • the number of years that you worked, or the periods treated as equivalent
  • your net taxable income
  • the age at which you take retirement
  • your job and position
  • your family circumstances

In general, the amount you receive when you retire will be higher if you earned more and/or worked longer. To receive the full State Pension amount, you must have worked a sufficient number of years and paid social security contributions. It is important to know where you stand, so that you can plan your future better.

Can I take early retirement?

To be able to access the early retirement State Pension, you must be 63 in 2019 and have 42 qualifying work years. Each year of work must consist of at least 104 working days (days accepted as equivalent also count).

2. Prepare your file

Do you want to retire early? Or are you thinking about working after retirement? In either case, you will have to provide evidence of your occupational activities during your entire working life. This information is used for making your pension claim. Start collecting contracts, pay slips and other supporting documentation as early as possible. That way, your claim is more likely to be ready to submit when you are ready to retire.

On the other hand, if you retire at the State Pension age of 65, you do not need to apply for your pension. Your claim is processed automatically, which means you will have to provide far less information to be able to access your pension.

Be aware

Even if you are far from a pensionable age, it is helpful to know that the State Pension age will be rising. In 2025 the State Pension age will go up to 66, and it is set to increase again in 2030, to 67.

3. Hand in your notice

When you are sure you want to retire, remember to tell your employer. The normal terms for employment termination are applicable, regardless of the type of contract you have, or your age. Remember to resign your employment in a registered letter (if possible, with confirmation of receipt). And inform your colleagues and managers. That way no one will be taken by surprise when the time comes.

4. Calculate the size of your nest egg

How much will I need and how much will I get when I retire? For most Belgians, the State Pension benefit won’t be enough to maintain their lifestyle. To get a better idea of your budget, calculate the State Pension amount you’ll receive. Remember to include your supplementary pension, such as employer pension funds or group insurance.

Finally, take stock of your savings. Perhaps you already have a simple savings account, a pension savings solution, a investment fund or a life insurance policy. If so, get in touch with your ING advisor, so that you can discuss your financial situation together. If you are fortunate enough to have a significant nest egg already, you can breathe easy. But if you have fewer reserves, you can still take steps to close your pension gap.

5. Say farewell to your colleagues and get set for your new projects

As you think about how to prepare for retirement, remember that as the latest chapter of your life is coming to a close, a new chapter is also beginning. Look forward to finally having more time for long holidays, sleeping in, or taking up old hobbies again. Hold a great farewell party and savour the freedom!

Working after your retirement?

You also have the option of taking your pension while you continue your working activities. There are just a few conditions you should be aware of:

In theory, you do not have to report your working activities, except in the following cases.

  • As a retired person you may not exceed the annual income limit, otherwise your pension could be suspended.
  • You may not continue to work and receive benefits at the same time.

How to prepare for retirement: start now!

Start a personal pension plan today so you can enjoy life to the full later!