The number of incomes with a state pension gap is increasing explosively

Prime Minister Willem Drees was the inventor of the old age provision in 1947, later renamed AOW. The AOW is available to everyone who reaches the age of 67. However, you will only receive a full benefit if you have lived in the Netherlands continuously since the age of 15. This is a problem if you have been abroad for a long time. You then have an AOW gap, also called an AOW gap.

The AOW is an insurance policy

The General Old Age Pension Act dates back to 1956. Everyone who lives and works in the Netherlands is automatically insured for AOW and is entitled to an AOW benefit as an old age provision. It doesn’t matter what nationality you have. But you are only entitled to a full AOW benefit if you have lived in the Netherlands continuously from the age of fifteen to the age of sixty-five. For every year that this is not the case, your AOW benefit will be reduced by 2%. There is then an AOW gap or AOW shortfall. Forecasts from the SVB (Social Insurance Bank) show that the number of retirees with a so-called AOW gap will rise to 590,000 (in 2024), while in 2010 this was still around 231,000. Compared to then, more than a doubling of people who have to provide a sufficient income in some other way from the age of 67. A new poverty problem emerging?

Who does it concern?

Returning emigrants, or guest workers who came to our country at a later age, in particular have a problem when they turn about 67. Not everyone has sufficient supplementary pension or assets. But Dutch people who have temporarily lived and worked abroad, such as tour guides and professional athletes, also have to deal with it. The consequence is that many retirees have to rely on additional assistance (Supplementary Income Provision for the Elderly, AIO).

Repair the AOW gap in time

Sometimes you can repair the damage in time. Sometimes it is possible to purchase AOW after arrival or return to the Netherlands, for the years you spent abroad. But that quickly costs a few thousand euros per year. For example, if you stayed abroad for 10 years, you are talking about a significant amount of money to repair the hole. Whether it is wise to repair the damage naturally depends on the personal situation. But if in such a situation you plan to put money aside for your old age, it could be wiser to buy additional AOW years than to invest the money in a private pension fund. For advice, contact a certified company with an FFP quality mark that can map the AOW gap for you. Ask such an expert to look at all your income and asset components and propose solutions where necessary.

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