Retiring early or cutting back on work: how do you build up your pension?

Legislation on the deferral of the increase in the state pension age stipulates that the state pension age will rise at a slower rate than previously agreed.

• For 2026 and 2027, the state pension age is 67.
• From 2028 to 2031 inclusive, the state pension age is 67 years and three months.

You’ll accrue a full state pension if you’ve been insured under the state pension scheme continuously for the 50 years prior to reaching state pension age. You’re usually insured if you live or work in the Netherlands. For every year that you’re not insured, your state pension will, in principle, be reduced by 2%. How much state pension you receive depends on your personal situation. From 1 July 2026, the full gross state pension for a single person is €1,662.16 per month. For married couples or those living together, it’s €1,139.39 gross per month per person. On top of that, you get holiday pay, which the SVB (Social Insurance Bank) pays out every year in May

Many pension plans allow you to retire earlier. The following options may be available with the pension you’ve built up through your employer:

1. Part-time pension

A part-time pension might interest you if you don’t want to retire completely just yet. Many pension plans will allow you to switch to working part-time before you retire altogether. You can then request early retirement on a part-time basis. For example, you can retire for one or two days a week, while still working on the other days.

2. High/low pension

You can often choose to receive more of your pension over the first 5 or 10 years, and then receive a reduced pension afterwards. This could work for you if you need a higher income at first and less later on, such as when you expect your expenses to be higher in your first few years of retirement because of travel plans or other activities.

3. Take a higher retirement pension and lower partner’s pension (or vice versa)

If you don’t have a partner or if your partner has enough income of their own, you can reduce the partner’s pension and increase your own retirement pension. It works the other way round too. If, for instance, not enough pension has been built up for your current partner following a divorce and they have a low income, you can choose to reduce your retirement pension and increase the partner’s pension. 

4. Have your pension paid out earlier

Most pension plans offer the chance for you to retire early. The actual options vary depending on the pension plan. Some plans allow you to start drawing your pension a few years before you reach state pension age, for example five years earlier. Always check the terms and conditions with your pension provider. If you retire early, you’ll receive a lower pension than if you wait until you reach the standard retirement age. This is because when you retire early, you’ll stop building up a pension and the pension capital you’ve built up has to be paid out over a longer period.

It’s important to remember that you can retire early without having to start drawing your pension straight away. If you’re considering this, you might be able to bridge that period with other income or capital to cover your expenses. To find out whether this would benefit you, request a Financial Outlook to assess how it would affect your finances.

As a rule of thumb, your pension will be around 7% to 8% lower for every year you bring forward the start date. The exact reduction varies depending on your pension plan. You should, therefore, always ask your pension provider for a personalised calculation.

If you stop working early, you won’t get a state pension just yet. Also, as mentioned above, you don’t have to start drawing your pension straight away. You can sometimes bridge the gap with savings, investments, an annuity payment, equity in your home or the proceeds from the sale of your business. Work out in advance how much net income you’ll need each month and what impact each choice will have on your income later. This will help you avoid withdrawing too much of your savings during the first few years of retirement or unnecessarily reducing your lifetime pension.

Retiring early without taking your retirement pension straight away could have consequences for the partner’s pension. These consequences vary depending on the pension plan. In particular, a risk-based partner’s pension may change if you stop working, leave your job or defer your retirement. There are various possible scenarios. In some cases, you could even end up forfeiting the partner’s pension if you continue working after retirement age. You should, therefore, check your pension plan rules in advance or ask your pension provider for a calculation. You can find more information about your state pension and the pension you have built up with all your employers at mijnpensioenoverzicht.nl. 

If you want to retire early or reduce your working hours, you first need to work out how much income you need to live on. If your combined state pension and workplace pension are not enough, you can top up your pension in the following ways:

Save with an annuity

An annuity lets you generate additional income while taking advantage of tax relief. There are two parts to an annuity: First, you start building up your annuity capital. After the savings period (accrual phase), the accumulated capital will be paid out to you in instalments (payout phase). You can do this through an insurer or a bank.

Make extra repayments on your mortgage

As a homeowner, you can build up capital by paying off your mortgage and increasing the equity in your home. If you expect to have a lower income in the future, consider making changes to your living expenses in good time. Making extra repayments will bring down your monthly mortgage costs. Whether it’s wise to pay off more on your mortgage depends on your personal financial situation and your mortgage terms and conditions.

Saving or investing

You can also choose to build up additional capital through savings or investments. You can then use these funds to top up your pension later. How much money will you need in the future? How large a capital buffer do you need to top up your pension? In addition to the period you need to cover and the amount you need to top up your pension by annually, the return on your assets also determines how much capital you need to contribute. The higher the return, the less capital you need to set aside to build up a buffer.

Selling your business

If you’re a business owner, you can use the proceeds from the sale of your business as extra income for your retirement. In our article ’Retirement and selling your business’, you can read how it works and what your options are.

When it comes to your pension, you’ve got a range of options. Make sure you regularly check the pension statement from your pension fund and do a pension check. If you need to make any changes, you still have plenty of time to build up additional capital. The sooner you start doing that, the more beneficial it can ultimately be. Please contact your adviser to discuss your financial options.

• Should you top up your pension or repay your mortgage?
• Building up a pension: what action can you take?
• Top up your pension with ABN AMRO