Building up a pension via your old employer
Are you just becoming an entrepreneur and leaving an employer behind? It might be possible to continue your pension through your former employer. We call this a group personal pension. With this pension, you share the risk with other employees. You contribute a certain amount each month. Do you opt for this? Then keep in mind that you have to pay the entire premium yourself. As this premium is only deductible up to a maximum of 10 years after dismissal, few freelancers choose this option. It is worth considering if you have an attractive scheme with your former employer.
Use the FOR (Fiscale Oudedagsreserve)
Do you want to build up your pension as a freelancer but rather not use money from your company? Then you can use the FOR (Fiscale Oudedagsreserve), where you can set aside part of your profits to invest in your pension. On that part of the profit, you will receive a tax deferral. Do you retire? Then you have this amount converted into an annuity. You then only pay tax on the annuity instalment. This is fiscally interesting for self-employed people because you pay less income tax after reaching your state pension age. You can convert the FOR into an annuity with an investment institution, insurer, or bank.
To use the FOR, however, you must meet several conditions.
- You have worked a minimum of 1,225 hours for your business per year.
- You have yet to reach the state pension age at the beginning of the calendar year.
- You have sufficient business assets. This means that the total accrued amount of the FOR may be, at most, your company's equity.
Bank savings as an entrepreneur
Do you prefer to put money aside yourself every month? Then bank saving is an option to secure money in a savings account with tax benefits. Here, you decide how much money you put away each month and within how many years you want to withdraw the money. A significant advantage of securing your money is that you do not pay a wealth tax.
It is also possible to save your pension in your personal savings account. That way, you can access it anytime, but you won't benefit from the tax advantages either. In that case, you do pay wealth tax on the saved amount and fall into Box 3. This is not advantageous for you as an entrepreneur. If you use bank savings and have the amount paid out periodically on a set date as soon as you stop working, you will also pay tax, but from Box 1. This is more advantageous.
Note: Bank savings and annuity insurance fall under the heading of 'annuity' for tax purposes. But there are differences. Consider, for instance, the length of the benefit, costs, and interest payments. So it is essential to find out more about these before making a choice.
Investing yourself
Investing yourself within your annual allowance
Are you aware of all the rules? Then you can start investing yourself. You can do this with an online broker. You open an account that you cannot access directly, as you deposit money here for a certain period. You bear the risk yourself and are responsible for calculating your annual margin. Want to know more about the possibilities? Then it's best to do your own research on 'pension schemes with online brokers'.
Pension scheme for self-employed people
Nowadays, it is also possible to use a ZZP (self-employed) pension scheme. Before considering joining a party, it is wise to determine administration and investment costs. If you opt for a 'Pension scheme for ZZP'ers', it is essential to know that you enter into an investment scheme where you choose between high or low risk. With these investments, you do not have to take your annual margin and calculations into account yourself; your chosen party will do this for you. Sometimes, you may deposit more yearly because you have not fully used the annual margin from previous years.
Freelancing through Computer Futures?
At Computer Futures, we are ready to support you as a (starting) freelancer. Would you like to meet with one of our consultants? Leave your details, and we will get back to you as soon as possible.
