54 – an important year for your pension savings plan

Whether you’re quietly looking forward to it or absolutely dreading it, retirement is getting closer. Putting money into a pension savings fund or a pension savings insurance plan not only helps you prepare for that moment when it finally arrives, it’ll give you financial peace of mind too. The year in which you turn 54 is an important one for pension saving, because the amount you deposit in that year determines what you can save between then and your 60th birthday.

What do you need to know about pension saving after turning 54?

When you turn 60, you pay a final tax of 8% on what you’ve saved until then. After paying that tax, you can choose to:

Withdraw your money
Continue saving an amount of your choice for another five years at most (you’ll still qualify for your tax benefit and not be taxed on what you put in)

The amount you deposit when you turn 54 determines what you deposit from your 55th birthday until you turn 60. You cannot increase that amount during those five years. Should you do so, the final tax would be deferred and no longer deducted when you turn 60. This means that deposits you make after turning 60 would be included in the calculation of that final tax and would, therefore, result in you paying more in tax.

How do we determine the maximum tax-efficient amount for your pension savings fund?

To determine this figure, we look at what you were putting into your pension savings fund when you were 54.

A few examples:

If you paid the higher maximum amount eligible for tax relief when you were 54 (1,310 euros in 2024), that will also be your fixed amount from your 55th birthday until you turn 60. Whether you deposit the same amount or less over the next few years doesn’t make any difference as far as you are concerned.
If you deposited the lower maximum amount when you were 54 (1,020 euros in 2024), this is your fixed amount and you can no longer opt for the higher figure for the next five years.
If you deposited a lower amount into your pension savings fund when you were 54, we’ll work out the average replacement ratio of your deposits over the previous five years and multiply it by the higher maximum amount eligible for tax relief. The result will then be your amount for the next five years.

If you want to keep your options open, you should deposit the higher maximum tax-efficient amount of 1,310 euros in the year you turn 54 if at all possible. This amount is then locked in and you are free to either continue paying that same amount or switch to a lower amount for the next five years.

Where can you find your maximum amount eligible for tax relief?

It’s easy to find this maximum figure for your pension savings fund in KBC Brussels Mobile. Just go to ‘Investments’ (piggy bank icon), tap ‘Tax-advantaged savings and investments’ and then your contract to see all the relevant information on your pension savings plan.

If you have questions or you’d like to know more, don’t hesitate to contact your KBC Brussels branch or KBC Brussels Live.