How does pension investing work?

You contribute to a lijfrente account and that money is invested until your retirement date. In return there are three tax advantages:

• Your contribution is deductible from your taxable income, within your jaarruimte and reserveringsruimte.
• The capital built up does not fall into box 3 during the accrual phase.
• You only pay income tax once the benefit starts, often at a lower rate.

The trade-off: the money is fiscally locked until your retirement date. Calculate your room with the jaarruimte calculator or read how pension investing works.