Smart planning provides peace of mind
What do you need to have a comfortable life later on? Get an idea of your future income and expenditure below.
1️⃣ What income sources will you have?
Log in to the government's online pension portal MyPension* to see your state and supplementary pension rights. Also check the qualifying years for your pension and report any errors in good time.
* Due to the ongoing impact of the reforms to pensions, MyPension is temporarily not providing an estimate of your earliest possible retirement date and the size of your pension.
If you know you’ll receive rental income or are planning to take a flexi-job or do volunteer work, these factors should also be included in your calculations. After taking statutory retirement, you can usually earn unlimited extra income through a flexi-job or you can do voluntary work in return for a modest payment. Either way, you can add a little more to your monthly income.
Your state retirement pension will probably not be enough to leave you in a comfortable financial position. Therefore, you should supplement it with pension saving and long-term saving. If, after doing this, you still have financial resources available, it could be worthwhile considering making investments. That’s because combining saving with investing can increase your chances of earning a return. For further information, see ‘3. Make conscious choices’.
If you’re self-employed,
reflect on how to reduce the time spent working or how to stop working altogether and think about your plans for your business.
2️⃣ What do you expect to spend your money on in the future?
What appeals to you most – living frugally or leading a lavish lifestyle? The type of life you want to live can give you a better idea of how much you need in the years ahead. How much exactly is very personal, but a handy rule of thumb is that you’ll need around 70-80% of your current monthly income.
Are you going to remain where you live now or are you going to make things easier for yourself and downsize later? No matter where you live, you always have to spend money on things like rent or loan instalments, energy, maintenance or possible adaptations and renovations. For further information, see ‘3. Make conscious choices’.
Your personal mobility also requires attention: how do you get from A to B if you no longer work? Are you going to cycle, take the bus or do you need a car (of your own)?
Today, your mobility may partly depend on your employer in that they provide you with a company car, lease bike or a season ticket for public transport. Therefore, check what ceases to be provided when you stop working.
Employers also often provide other employee benefits that usually stop when you retire, such as a smartphone (with or without a subscription) and meal vouchers.
Sometimes you also receive a supplementary pension, or are covered by hospitalisation insurance or group insurance, through your work. Here, too, check what you have now and what will end. In most cases, you can continue your hospitalisation insurance after retirement, but the premium will often be much higher.
Medical expenses (for doctor’s visits, medicine, glasses, dental care and physiotherapy) can mount up as you get older. Bear in mind that, one day, you might require home care or have to stay temporarily or longer in a care institution.
When you’re retired, you still have to pay taxes in Belgium. So, look at ways to continue benefiting from the maximum amount of tax relief after turning 65. For further information, see ‘3. Make conscious choices’.
Always keep some savings in reserve to cover unexpected expenses – generally speaking, the equivalent of three to six months’ net salary is sufficient.
3️⃣ Will you have enough money to live your dreams?
Now you’ve an idea of your income, compare it with your expected costs later and estimate whether you’ll have enough to give you the lifestyle you want. There’s no need to worry if your numbers don’t tally, as we can advise you on that situation too.
