How annuity payouts work

You have made deposits for years, your assets have grown, and then the time has come: your annuity is released. But what exactly does that mean? And how do you ensure that you actually receive money in your account soon? In this blog, we explain how annuity payouts work, what you can expect in terms of tax, and how to calculate how much you receive monthly.

What does it mean when your annuity is released?

An annuity is released as soon as the agreed end date of your accrual phase is reached. You are allowed to start the payout from five years before your state pension (AOW) age, but also later. You therefore choose yourself whether you want to start before or after your AOW. However, a fiscal limit applies: the payout must start no later than the calendar year after the year in which you reach the state pension (AOW) age. From that moment, the accrual phase ends and you convert the accrued assets into a periodic payout.

Important to know: in most cases, you cannot withdraw the amount in one go. The tax authorities granted a tax advantage on your deposits at the time, and a structured payout is part of that. If you do not do this on time, the Tax Authorities (Belastingdienst) see this as a surrender. That means income tax on the full amount and revision interest: a penalty that can increase significantly. This combination can be quite costly, so make sure you take action on time when your annuity is released.

How do you calculate your annuity payout?

The amount of your monthly payout depends on a few factors: the value of your accrued capital, the term you choose (for example, ten or twenty years), and the market interest rate at the moment you start receiving payments. A calculation example: with a capital of 100,000 euros and a payout duration of twenty years, you can expect around 400 to 500 euros gross per month. This is indicative and differs per situation, but it does give an idea of what you can expect after years of accrual.

With Vive, you can see exactly how your assets are developing and what you can expect in the app. No surprises, but clear insight into your future. Curious about how much you can currently deposit for tax purposes? Then check the annual allowance calculator.

Annuity payout and tax

You pay income tax in box 1 on your annuity payout. The good news: after your state pension (AOW) age, you no longer pay AOW premium, which means your effective tax rate is often a lot lower than during your working years. That is exactly the idea behind the annuity: you deduct against a high rate when you work, and later pay tax against a lower rate. Double benefit, provided you approach it smartly. For the self-employed (ZZP) and entrepreneurs without an employer's pension, this is often one of the smartest ways to build up assets for the future in a tax-advantageous way.

What if you want to receive a payout earlier?

Taking out your annuity early may sound attractive, but from a fiscal point of view, it is almost always a bad idea. You then pay not only income tax on the entire amount, but also revision interest: a penalty that can amount to up to twenty per cent. In practice, you will quickly lose forty to sixty per cent of your capital. There is one exception: for small annuities where the total surrender value remains below the legal limit (around 5,400 euros in 2025), you are allowed to pay out the amount in one go without revision interest. You then only pay income tax.

Digital and transparent payouts with Vive

At Vive, the entire process is digital. You follow your accrual in the app and see what you can expect. When the moment arrives, we are happy to help you outline the options for converting your annuity into a payout. No paperwork, no opaque policies, just clear insight into what belongs to you. Do you want to know more about how pension investing works and what it yields for you? Then read more on our page about pension investing.

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