Simulate your Belgian pension saving
The Belgian pension saving scheme is a popular way for Belgians to save for their pension. Its main attraction is the tax advantage, where you can earn part of your contributions back as a tax rebate.
Unfortunately, it’s not all as rosy as it seems. Use this simulator to find out:
- 💰 How much you’re actually saving, and if it’s enough to sustain your life past retirement.
- 🏢 You pay a tax at age 60 that undoes part of the tax break.
- 💸 You pay hefty fees to the banks and insurers that sell the pension saving products.
About the simulation
Historical returns
The simulation uses historical data to calculate the expected return of the pension funds, branch-21 insurances, and ETFs. The problem with historical data is that some funds have a longer history than others. For instance, Fintro Metropolitan-Rentastro Sustainable Growth started in 1987. But the data for a more recent fund like Crelan Pension Fund Sustainable Growth goes back to only 2015.
The longer the historical data, the better we can estimate future returns. So that's why we only include funds with at least 15 years of historical data. As a consequence, we have to exclude some funds from the simulation:
- Belfius Pension Fund Balanced Plus (started in December 2012)
- Crelan Pension Fund Sustainable Growth (started in November 2015)
- Crelan Pension Fund Sustainable Balanced (started in November 2015)
- Crelan Pension Fund Sustainable Stability (started in November 2015)
Simulating the ETF
We chose an ETF tracking the MSCI World index as it's a good representation of the global stock market. Consequently, it's one of the most popular indexes among ETF investors.
We use the same historical period to calculate the expected return for the ETF as for the pension saving funds. The simulation for the ETF is also similar, with the following differences:
- There's no tax break.
- There's no end tax at the age of 60.
- Each transaction is liable to a 0.12% stock exchange transaction tax (TOB).
I have questions or feedback
In that case, please let us know by emailing us at help@curvo.eu. We'd love to hear from you!
About Belgian pension saving
Why does the ETF outperform pension saving funds?
Global equity ETFs, like those tracking the MSCI World index, tend to outperform pension savings funds. There are several reasons for this.
The first key constraint is the limit on the allocation to equities. ETFs can invest 100% in equities. But pension saving funds can invest a max of 75% in them.
Second, there are strict geographical restrictions. Pension savings funds must focus their investments primarily on European equities. They can invest only 20% outside the European Economic Area. This means very limited exposure to U.S. equities, even though they have had the best performance over the past 15 years.
Finally, pension saving funds must invest in smaller companies (small caps). On top, the government defines small caps as having a market capitalisation of at most €3 billion, but this definition is outdated. This creates problems when companies exceed this limit due to price changes.
We hope that one day, the government will relax these rules because they limit the returns of pension saving funds, along with the pension of Belgian savers.
How is pension saving taxed?
At age 60, you have to pay a end tax of 8% on your total savings.
Can I withdraw my pension saving fund?
Yes. But you have to pay a 33% penalty if you withdraw your savings before the age of 60. So it comes at a heavy cost! The goal of pension saving is that you don’t touch it before retirement.
How much can I contribute to my pension saving in 2024?
You can contribute up to €1,310 in 2024. You can choose to contribute the entire amount in one go, or spread out throughout the year.
How can I save more for my pension?
There are a couple of ways you can save more towards your pension:
- Save through the occupational pension ("aanvullend pensioen" or "pension complémentaire") through your employer.
- Save additional funds on your own by investing, for instance in ETFs.
A few words of caution: just because an investment did well in the past doesn't mean it'll do the same in the future. Historical performance and statistical projections like on this page may not reflect actual future performance. This simulator provides an indicative calculation only. Actual results may differ significantly from the simulations shown. This simulator also does not provide personal investment advice. For individual investment advice, we recommend you contact an authorised financial adviser.