If you are self-employed, I would like to know whether you have properly arranged your pension. Research shows that 50% of the self-employed have not arranged a pension. And I was there too. That’s pretty decent, isn’t it.
Would this 50% of entrepreneurs who have not built up a pension consider that they will continue to work until the end of their lives? That’s not possible, is it?
So it is actually a must to take care of yourself as a self-employed person and to take out the right important insurance policies. However, many entrepreneurs do not. Sometimes because they just don’t think about it, but often enough simply because there is no money available.
Arrange your pension properly as a self-employed person, what should you do?
As I mentioned above, I have not done anything about my pension for a long time.
In the years that I worked as an employee for a boss, I built up a decent pension, but in the past 13 years as a self-employed person I have done nothing about it. Dom.
However, most entrepreneurs have a specific reason why they do not take out a pension. I’ll go through them with you.
No money? Pension costs are deductible!
My reason (and that of many other entrepreneurs)? Initially, my choice was mainly financial. I just didn’t have enough money in my business account to also invest in my retirement.
In hindsight, this was not entirely justified, because you can of course simply enter the costs you incur for contributing to your pension as a self-employed person as a deductible item. As long as your pension remains within the tax limits that have been set.
You can find more information about those tax limits here at the Tax and Customs Administration.
But to be honest, I didn’t watch this. I just couldn’t miss the amount from my account for my feeling.
A family with young children, a substantial mortgage for a detached house, a web shop that required substantial investments every year to be able to sell: I found it too exciting to miss even more money. So no pension for me as a self-employed person.
Partner has arranged pension well
Another feeling that played a part in me is the feeling that my partner’s pension is well arranged. How ‘blue’ are you if you think like that?
I can still get very angry afterwards that I sometimes think that way. Because anyone who knows me knows that I value being financially independent. I think it is one of the most important issues in my life.
In fact, I think every woman should strive for this. Not being dependent on your partner is a great thing. It ensures that you can make free choices.
But in terms of retirement, I apparently didn’t think it through. And I do get it. When I started my own business 13 years ago as a self-employed person, I was also a bit further away from my pension than now. But still it’s not smart.
Because no one guarantees a long and happy life with your partner. And if that is not for you, you are without a pension with the baked pears.
Despite the fact that our relationship is ‘good’, in recent months I have studied my own pension as a self-employed professional. Because entrepreneurship can be fantastic, I also want to be behind the geraniums when I’m 85, instead of behind my PC. Haha.
Arranging your pension as a self-employed person, how do you do that?
In any case, as a self-employed person you are entitled to your state pension, just like everyone else, but a supplementary pension can of course be very welcome. You can arrange such a supplementary pension in a number of ways:
1. Continue with your old pension that you received as an employee
This is perhaps the easiest option. Are you starting as a self-employed person and do you have to arrange your own pension? Then contact the pension insurer with which you were already affiliated through your last employer to see what your options are for continuing your pension as a self-employed person with the same company.
2. Collective pension scheme for the self-employed
There seem to be group pension schemes for the self-employed that you can join voluntarily. These are therefore different schemes than the compulsory professional group of pensions that self-employed persons from the sector in question can join (read more about this below).
Now I’ve searched quite a bit on the internet, but to be honest I can’t find them easily. The ZZP Pension used to exist. That was one of those voluntary pension schemes that you could join as a self-employed person.
This currently no longer exists in the form in which it was set up and if you look for it now you will find the ASR.
Which leads me to the most practical solution for a self-employed person to accrue pension, namely an annuity policy.
3. Take out an annuity for your pension as a self-employed person
I have already taken this step myself. I already had an annuity, but I only deposited a small amount per month. I have now expanded this myself in order to provide for a good pension.
First we looked at my reserve margin (the amount that I have not used in recent years to pay into a pension, but that I can still use with all the tax benefits).
Then we made a one-off large deposit of the money that I still had in my profit account in my self-employed pension.
We then calculated my annual allowance (many pension banks have a handy tool for this), and divided that amount by 12 to divide it into monthly payments.
I had my annuity running through ASR and we expanded it further. In addition, we have made an extra pension scheme at Brand New Day. You can do this, for example, through Pension Savings, but also through Pension Investing.
The latter may give a higher return, but of course you also run more risk. Apart from this, the big advantage of a self-employed pension scheme in the form of a kind of annuity is that you really create your own pension pot and that is always a nice feeling.
Tip: make sure that this amount is transferred monthly from your business account for your self-employed pension and that you reserve it as costs. That way you can be sure that you are putting away the largest possible (tax-efficient) amount for later.
Self-employed entrepreneurs who are obliged to take out a pension
So at the moment there are many self-employed people who are free to decide for themselves what they do with their pension. But did you know that there are also self-employed persons who are obliged to accrue a pension?
I read the following on the Chamber of Commerce website:
There is a compulsory pension scheme in certain occupational groups or industries, even if you are self-employed in that occupational group. Participation is mandatory for:
- painting companies, glazing companies and finishing companies
- plastering companies, finishing companies, natural stone companies and terrazzo/flooring companies
But other professional groups are also obliged to take out a pension as a self-employed person. Participation in an occupational pension fund is also compulsory for:
- pharmacists
- veterinarians
- physiotherapists
- general practitioners
- midwives
- medical specialists
- pilots
- (candidate) notaries
- rowers in the Rotterdam Port area
Of course, this is only a small part of the self-employed who are obliged to take out a pension. Fortunately, in 2023, the new Pension Act will also give other independent entrepreneurs more room to build up a pension from a tax point of view.
This new Pension Act will probably take effect on 1 July 2023.
Why is it so interesting to use your pension annual space?
This is fiscally attractive because you will receive a part back from the tax authorities (depending on your income, this is between 37 and 49%).
So, for example, if you invest € 1000.00 per year in a pension for yourself as a self-employed person, you will receive at least 37% back from the tax authorities on your tax return.
Keep in mind that when your pension is paid out, you will have to pay tax on it again. The advantage lies in the fact that you are (usually) in a lower income group, so that you pay relatively less tax.
Are you not yet an entrepreneur? Don’t let the above stop you from starting a business. It may be a bit of arranging, but once your pension as a self-employed person is properly arranged, you’re good to go!
Hi, welcome to lifestyle blog MamsatWork. I am Joyce, content creator and internet entrepreneur, married and mother of an adolescent and a teenager.
This platform has grown from a personal blog into a lifestyle platform where new articles appear daily. A versatile blog with topics such as lifestyle, interior, food, entrepreneurship, education, travel, outings, fashion and DIY.
You will find plenty of inspiration here. Do you have questions? email me!