What you have to think about when preparing to retire.

So, you’re at least 58 years old and planning to stop working. That means there are important decisions for you to take, which will determine your financial circumstances for the rest of your life and can’t be reversed later. These fundamental decisions must be guided by your health, your family circumstances and your financial situation. What is vital is that you calculate the tax implications of your course of action and your personal budget for the time after retirement. Take enough time to plan your retirement and discuss it in advance with the people close to you.

When can I retire?

With comPlan, you can, in principle, retire at any time between your 58th and 65th birthday. This rule applies to women and men alike. You can also, in consultation with your employer, retire in a number of stages. The earlier you retire, the less you will receive in retirement benefits. Your benefits are reduced if you retire early because you have made savings contributions, and your retirement savings have borne interest, for a shorter period. Apart from that, the conversion rate is lower, as your life expectancy at the time you retire early is higher and you will be receiving the retirement pension for longer.

How much are my retirement benefits?

You can find out the amount of your retirement savings and of your retirement pension between the ages of 58 and 65 from your statement of insurance for each completed year of life. To calculate your lifelong retirement pension, multiply your retirement savings by the conversion rate, which is dependent on your age. The amount of your bridging pension and of any child pensions will also be shown on your statement of insurance. You can use comPlan Online to calculate for yourself retirement dates which are between two full years of life.

Can I take my retirement benefits as a lump sum or as a pension?

You can decide for yourself whether you want, when you retire, to take your retirement savings as a one-off lump sum or to convert them into a pension for the rest of your life. You can also take any percentage of your savings you wish as a lump sum and convert the rest into a pension. However, in accordance with our pension fund regulations, you must notify us of a capital withdrawal in writing at least one month prior to your retirement. If you are married or in a registered partnership, you must have this application co-signed by your spouse or registered partner and certified by a notary. Changes to the submitted application may be made up to one month prior to your retirement and must also be co-signed by your partner (with certification from a notary).

What are the advantages and disadvantages of a pension and of a lump sum respectively?

The advantage of a retirement pension is that you get a guaranteed income for the rest of your life. Your spouse or partner also gets a lifelong survivor's pension when you die. And a pension spares you the time and effort involved in investing.

On the other hand, a lump sum does mean you have the freedom and flexibility to do what you like with your money. The capital passes to your heirs when you die. You also have the opportunity to generate a positive return by investing it. At the same time, though, you do of course bear the risk of any losses. If you take out all the capital, you cease to be insured with us. In this case, your bridging pension will also be paid out as a lump sum and there will be no retirement child pensions or benefits for future survivors. So, then, from the moment you take out all the capital, you bear all the investment, longevity and mortality risks yourself.

What are the main tax consequences?

Pension payments must be fully taxed as normal income for the rest of your life. Lump-sum payments are taxed once at a reduced tax rate, which varies depending on the municipality, your marital status and denomination, and the amount involved. They are taxed quite separately from your taxable income. Once received, lump sums are subject to wealth tax, and income from capital is taxed as income. If you withdraw a lump sum, the tax authorities will also check whether you have made tax-privileged purchases into the pension fund in the three years before your retirement, as there is a three-year blocking period for lump-sum payments after such purchases are made. If you have failed to comply with this blocking period or are unable to do so, you will be required to pay income tax on the purchases you have already made. An exception is made for repayments of advances on divorce.

If you are domiciled abroad for tax purposes, though, your tax situation may be quite different. If you are, we recommend that you clarify the tax implications of a lump-sum or retirement pension with the tax authorities there or discuss them with a tax advisor.

Can I postpone my retirement if I continue to work beyond 65? 

If you agree with your employer to extend your employment contract without interruption when you reach the reference age, you can defer your retirement with comPlan. You also have the choice of whether you (and your employer) want to continue paying savings contributions or not. If you decide to continue paying savings contributions, you will remain in the savings variant you previously selected. Changing your savings variant is no longer possible. However, you can always decide to stop paying savings contributions.

During the pension deferral, you have the option to choose your retirement at any time. You also decide whether you want to withdraw a pension, a lump sum or a combination of both. The pension will be higher than at the reference age because your savings capital will continue to earn interest and the conversion rate will increase each month.