What does pension mean for Lisa and Ben?
The counter in the TNO Pension Fund pension portal says that there’s more than 40 years to go until your retirement. It seems such a long way off. Yet it can be interesting to reflect on your pension now and at certain points it’s even vital that you do that.
The year has only just started and we’re talking about pensions on TNO’s 10th floor with its stunning views across The Hague. What do pensions mean to you, how do you prepare for your retirement, and when you actually retire, what are you going to do? We talk about this with Lisa and Ben from TNO. Lisa Hulshof and Ben Smits know each other from the TNO trainee programme. Ben is in the SME programme and will start at Digital Built Environment in February. Lisa has now completed her training programme and has been working for a year at the Energy & Materials Transition unit. She is project manager and team leader for the electrolysis team in Petten.
For Lisa, retirement seemed ‘a long way off’ until energy prices started rising.
Pension
‘When I’d just started work I noticed the huge counter in the pension portal that counts down until your pension. It said I had over forty years still to go,’ explained Lisa. ‘That image really stayed with me. But I’ve now started studying this in more depth. Certainly last year when my energy bill was suddenly six times as high. That makes you start being more aware of your finances. I pay part of my salary as a pension contribution and now know something about accruing pension, but it’s a complex system.’
It’s different for Ben. He took a Minor in Finance during his studies and already started investing his student loans at that time. Investing also aroused his interest in pensions. ‘When I started work I saw amounts deducted from my salary for my pension.
I wondered what happened with that money and whether I could manage my own pension so I could decide how this is used. My pension is something I need in forty years’ time but I’m living now. My father died when he was sixty. He worked long and hard and never managed to enjoy his pension.’
Lisa added that she also doesn’t want to wait until she’s retired before doing fun things. Ben recognized that and reminded her of her resolutions: ‘In the lift you told me about your New Year’s resolution to “Live more”. Are you going to do that?’ Lisa is certainly planning to: ‘I’m going backpacking on my own in Thailand next month.’
‘If I were to go to South America now, for example, I’d like to go kitesurfing or something like that, but I don’t have the money for that right now. And when I’m retired I may well have that money but then I’ll probably no longer be kitesurfing.’ (Ben)
When should you really start considering your pension?
Ben is already active with his pension. ‘I always read any letters that arrive about it, which is different from what my flatmate does. Maybe that’s because of my study. But I think it’s also because my dad died when I was twenty. I suddenly received an orphan’s pension that he’d accrued. That made me start thinking consciously about what I wanted to do with my money and I was also impressed by how my father had arranged all his finances properly for us; his family.’
Lisa expects to start paying attention to her pension once the new pension system has started. ‘Once that’s up and running I’ll start looking into it to see whether my pension will be less or more. And whether I’ll get back what I’m paying into it.’
Her father is an economist so they already discuss this, explained Lisa. ‘I understand that pensions will be becoming more individualized and this may make clearer how you accrue your pension and how much you’ll receive later. I’ll also then investigate whether I should accrue something else on top of this. I’m expecting that I’ll need to be much more active, will need to make more choices, and may need to accrue something else on top of this’, added Lisa.
What they both have in common is that they’d like to retire earlier; something they know many of their peers are planning. ‘I see that in my circle of friends and among other trainees,’ explained Ben.
It’s also clear that the conversation about pensions makes Ben and Lisa have questions and want to discuss pensions as a system. Why are we actually saving for our retirement? Is this the best way? Is it an expensive system and who is making money from it? Will lots of people retiring early have a negative impact on the pension system? And is our savings pot a debt for another country? These are interesting questions to consider in more depth.
Many of their contemporaries are also investing. They’re doing this to save for a house, to retire early, or to be financially independent.
How do you know whether your pension will be enough?
Lisa finds this difficult to calculate. ‘You’ve got other expenses if you own your own home, but I’m sure there are smart agencies that can calculate for you how much pension you’ll need.’ Ben calculates this himself: ‘Nibud has a calculation tool for this, but I prefer to estimate what I’d need after inflation and tax once I retire and then take that into account.’ But all in all, Lisa and Ben feel it’s still difficult to look into the future and give a meaningful answer to this. That’s not strange, of course. The main thing is to identify your expected income and expenditure. The TNO pension fund can help by providing pension statements and, for example, the Pension Planner.
What are your dreams, wishes, or plans for the future?
Ben: ‘I want to keep doing fun, meaningful things when I retire, like my uncle does now.’ Lisa certainly cannot imagine a life spent lazing around either but isn’t entirely sure what she will do: ‘Nobody knows what the world will be like then. What will have happened with the climate and geopolitics? It’s possible that many things will no longer be allowed.’ ‘That’s also why I want to live now,’ stated Ben. ‘Maybe you’ll no longer be able to fly, The Hague won’t exist, and you’ll live in Maastricht-on-Sea,’ joked Ben. They do have confidence in their pension but how the world will look is uncertain.
And that first day of retirement... First drinks or a party, for example, and what then? Lisa and Ben are very clear: first a party.
It’s clear that the pension system is fascinating and is perhaps a little complex at times. ‘You can’t exactly say how much you’ll get’, stated Lisa. ‘Although I generally think things will be alright. It’s not something that’s keeping me awake’, admitted Lisa. Ben thinks it’s wise to build something on top of your pension. ‘It takes more time and effort to recoup your losses than to lose your profits. Imagine that you’re over 50 and you see part of your pension evaporate. If you’ve not built anything else on top of that, you may think: I wish I’d done that 30 years ago.’
Basically, your retirement age seems a long way off, but thinking about your future is always worthwhile. This Life & Pension also has an article entitled Before you sign... Because if you buy a house or sign a cohabitation agreement, for example, this can impact the pension you receive later. There’s also more information on the website under When to take action?