The AOW state pension and your freelance retirement gap
How does the Dutch state pension (AOW) work for freelancers? Understand the rising retirement age, the benefit amount, and how to close the gap with your own pension savings.
As a freelancer, you have no employer putting money aside for your pension. Unlike employees who receive employer contributions into their company scheme, you rely entirely on the state AOW (Algemene Ouderdomswet) plus whatever you save yourself. Understanding how the AOW works, what it will actually pay you, and how to close the gap before retirement is essential to avoiding a sharp income drop in later life.
This guide walks you through the state pension as it works today, the age thresholds and benefit amounts you need to plan for, and the most tax-efficient ways to top it up.
The AOW: your basic state pension
The AOW is the Dutch state's mandatory, universal old-age insurance. It is not earnings-related — meaning your AOW benefit does not depend on how much you earned as a freelancer. Instead, it depends on how many years you lived and worked in the Netherlands between age 15 and your retirement age.
AOW basics
You contribute to the AOW automatically through payroll tax (via the employee's withholding if you were employed) or via your business tax filing if you are self-employed. The AOW covers the basic cost of living in retirement. For many freelancers, however, it is not enough to maintain their pre-retirement standard of living.
The rising AOW retirement age
One of the most important changes over the past decades is the rising age at which you can claim AOW. As life expectancy increased, the Dutch government has gradually raised the AOW eligibility age.
Current schedule (check the official Belastingdienst for the latest):
- 2025: 67 years old
- 2026: 67 years old
- 2027: 67 years and 3 months
- 2030: 68 years old
- 2035–2040: Gradually rising
- By 2060: Target of 71 years old
If you are in your 30s or 40s now, plan on working until 68–70 before claiming full AOW. If you took a gap year, spent time abroad, or had periods of illness, you may need to work a few months longer to earn a full year of AOW entitlement.
Check your AOW status
You can view your AOW history and your expected benefit at belastingdienst.nl via DigiD. This gives you a concrete number to plan around. If there are gaps, you can sometimes buy back contribution years.
How much will the AOW pay?
The AOW benefit amount is set yearly by the government and indexed to wage growth. The figures below are for 2025—check the official rate for 2026 and beyond.
- Single person: around €1,225 per month gross (before tax)
- Married or in a registered partnership: around €875 per person per month (the two do not get the full single rate each; the system pays a reduced "coupled" rate)
- Partners living separately (not married): each receives a single rate
The exact amount depends on your complete contribution history. If you lived outside the Netherlands for part of your adult life, or had years with no AOW contribution (e.g., full-time study without a job, or gaps in work), your benefit may be reduced proportionally.
What is the real value?
€1,225 per month (around €14,700 per year) is above the poverty line but well below the median Dutch income. For many freelancers who earned €3,000–€5,000+ per month while working, the jump down to AOW alone means a stark lifestyle change—less travel, smaller home, reduced discretionary spending.
Tax also applies. The AOW is subject to income tax in the Netherlands, so your net amount after tax is lower than the gross figure quoted above.
The retirement gap for freelancers
Employees in the Netherlands who work for a decent employer receive a company pension (bedrijfspensioenfonds). The employer and employee each contribute a percentage of salary. By retirement, an employee might have a company pension worth €500–€1,500+ per month, paid on top of the AOW.
You get no employer pension as a freelancer
Your employer is you. No one else is setting aside money for your retirement. This is the core difference between employment and self-employment: the convenience of an employer match is replaced by the freedom to choose how and where to save.
As a freelancer, you must build a second pillar yourself. If you do nothing, you retire on AOW alone and face a substantial drop in purchasing power. If you earn €4,000 per month as a freelancer and you live on most of it, retiring on €1,225 means cutting expenses by two-thirds—a very hard adjustment for many people.
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Try it freeHow to close the gap: building your own pension
The good news is that the Dutch tax system offers strong incentives to save for retirement. The main tools are:
1. Lijfrente and jaarruimte (deductible annuity savings)
The most tax-efficient way to save for retirement as a freelancer is via a lijfrente (annuity) using your jaarruimte (annual allowance).
You can deduct premiums you pay into a lijfrente up to your jaarruimte, which is calculated as a percentage of your profit (currently around 30% of your profit after entrepreneur deductions, though this fluctuates—check the latest rules). The money grows tax-free inside the annuity, and when you retire, the annuity pays you a monthly income.
Example: If your annual profit is €40,000 and your jaarruimte is €8,000, you can deduct €8,000 of lijfrente premiums and reduce your taxable income by that amount. That is immediate tax savings (at your marginal rate, likely 37–49%). Your €8,000 compounds tax-free for 20 or 30 years.
The trade-off: The money is locked in until retirement. You cannot withdraw it early (except in hardship). This is by design—it forces discipline and grows a proper nest egg.
Read more on deductible annuities and jaarruimte for the full mechanics.
2. Unrestricted savings (bank or investments, box 3)
Beyond your jaarruimte, you can save extra money in a regular bank account or investment account. These savings are subject to box 3 wealth tax in the Netherlands (on a deemed return, not the actual return). The tax is small but present.
Some freelancers prefer this flexibility—the money is not locked in. The trade-off is less tax efficiency and the temptation to spend it before retirement.
3. The old FOR (oudedagsreserve) — now phased out
The FOR was an older way to save for retirement. It allowed you to set aside a reserve and deduct it from profit each year. However, the FOR was abolished in 2023. If you still have an active FOR, you must settle it and convert it to a lijfrente or other savings.
Building a realistic retirement plan
Here is a worked example:
Scenario: You are a 35-year-old freelancer earning €50,000 net profit per year. You plan to retire at 67 (in 32 years).
- Expected AOW at 67: around €1,225/month (€14,700/year)
- Desired retirement income: €2,500/month (€30,000/year) — a 50% reduction from your current gross of around €60,000
- Gap to close: €2,500 − €1,225 = €1,275/month (€15,300/year)
- Pension savings needed: Roughly €300,000–€350,000 in a lijfrente to generate €1,275/month at retirement
You achieve this by:
- Dedicating a portion of profit to lijfrente each year (within your jaarruimte)
- Starting early to benefit from 30+ years of compounding
- Reviewing the plan every few years and adjusting as income grows
This is why starting your pension savings in your 30s, rather than your 50s, makes such a difference.
Why freelancers must plan earlier
Employees often drift into retirement with a company pension already arranged. Freelancers must actively decide to save. The consequence is that many freelancers reach retirement age with little set aside, forcing them to either:
- Work longer than planned
- Accept a drastic lifestyle cut
- Rely on a partner's pension or savings
- Become dependent on means-tested government support
- Check your AOW forecast on belastingdienst.nl now to see your expected monthly amount
- Calculate your desired retirement income (consider travel, healthcare, hobbies, care costs)
- Find the gap between your AOW and desired income
- Set up a regular lijfrente contribution within your jaarruimte
- Review and adjust annually as your profit grows
Practical steps to get started
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Log into Mijn Belastingdienst (DigiD) and check your AOW history and forecast. Write down your expected AOW at retirement.
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Decide your retirement date. Are you comfortable working until 67? 68? 70? The longer you work, the less you need to save now.
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Open a lijfrente with a bank or insurer. You can choose between a bank saving version (very safe, lower returns) or an insurance annuity (more complex but often better terms). Both are deductible.
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Set a monthly or annual contribution. Start with what you can afford—even €200–€300/month compounds significantly over 25+ years.
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Make it automatic. Set up a standing order so the money transfers each month without you having to think about it. Out of sight, out of mind makes it easier to stick to.
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Revisit every 2–3 years. As your business grows, increase your contribution. As retirement nears, shift to lower-risk investments.
You can link your lijfrente savings to ZZP Belasting to forecast your tax position and ensure you are maximizing your jaarruimte each year.
Frequently asked questions
Do freelancers get an AOW pension credit (heffingskorting) like employees do?
What if I spent years abroad? Does my AOW get reduced?
Can I work part-time in retirement and still claim AOW?
Is it better to save via lijfrente or a regular investment account?
Your AOW is the foundation of your retirement, not the whole structure. As a freelancer, you have the freedom—and the responsibility—to build the rest yourself. Starting early and saving consistently in a tax-efficient way makes the difference between a stressful retirement and one where you can relax and enjoy the years you have earned.
Learn more about building a complete pension strategy and how to use lijfrente and jaarruimte effectively. And whenever you are ready to get organized, ZZP Belasting helps you track your income, profit, and tax-efficient pension contributions in one place.