- The fiscal old-age reserve (FOR) lets you set aside up to 9.44% of your profit (max €10,320 in 2025) annually.
- The FOR is a tax deferral, not a real saving - you settle it when you stop your business.
- An annuity premium is often fiscally smarter because the money is actually set aside.
- Your annual margin (jaarruimte) determines how much you can deduct.
- MOJKA Finance calculates your optimal retirement plan and annuity deduction.
As a freelancer or entrepreneur, you do not build up a pension through an employer. That sounds like freedom, but it also means you are responsible for your own retirement. The Dutch government offers two instruments: the fiscal old-age reserve (FOR) and the annuity deduction. Many entrepreneurs know the first but forget the second. And that is a missed opportunity, because the annuity is usually the smarter choice.
The fiscal old-age reserve (FOR)
The FOR allows you to reserve a portion of your profit on your business balance sheet each year. You deduct it from your taxable profit, reducing your tax bill. In 2025, you can reserve up to 9.44% of your profit, with a maximum of 10,320 euros.
But here is the catch: the FOR is not a separate pot of money. It sits as a liability on your balance sheet. The money is still in your business. When you stop your business, you must settle the entire FOR with the tax authority at once. Unless you convert it to an annuity.
Why an annuity is often better
With an annuity (lijfrente), you actually set money aside in a blocked bank account or with an insurer. The premium is tax-deductible, just like the FOR. But unlike the FOR, you do not need to settle when you stop your business. The money stays until retirement age, when it is paid out in instalments at a likely lower tax rate.
How much can you deduct?
Your annual margin (jaarruimte) determines how much annuity premium you can deduct. If you have unused margin from the past ten years, you can use that too through the reserveringsruimte.
The smart combination
Build up the FOR while your business runs (tax deferral) and convert it to an annuity before cessation. But this requires planning. Do not wait until the last moment.
Want to know your annual margin and how to build the optimal retirement plan? At MOJKA Finance, we calculate it and guide the execution. As your expat accountant in Rotterdam, MOJKA Finance is here to help – view our services or schedule a consultation.
This article is intended for general informational purposes only and does not constitute tax, financial or accounting advice. For advice tailored to your situation, please contact us. Read our full disclaimer.
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