Early Retirement Pension in Utrecht: the tax consequences at a glance
Early retirement pension sounds attractive, but has important tax consequences. By stopping work earlier, you face higher tax pressure due to the absence of employment allowance, revision interest on stamped-off pension, an AOW gap and permanent pension reduction. On average, early retirement pension results in an income drop of 20-35%. For Utrecht residents: consult District Court Midden-Nederland (Vrouwe Justitiaplein 1) or Juridisch Loket Utrecht (Catharijnesingel 55).
Main tax consequences of early retirement pension
If you take early retirement pension in Utrecht, your tax situation changes drastically. The main tax consequences are:
- Higher tax pressure: You lose the employment allowance (€5,052 in 2024) and pay more tax on your pension income
- Revision interest: When stamping off accrued pension, you pay a one-time revision interest of up to 20% to the Tax Authorities
- AOW gap: Between early pension date and AOW age (67 in 2024) you miss approximately €1,400 net per month
- Permanent pension reduction: Monthly pension decreases by 5-8% per early year, for life
- Less accrual: No new pension accrual, which reduces your total pension
These effects lead to an income decline of 20-35%. For personal calculations: Juridisch Loket Utrecht, Catharijnesingel 55.
Tax pressure with early retirement pension
The tax pressure increases significantly. You lose employment allowance (max. €5,052 in 2024) and general tax credit (€3,362).
Tax rates 2024
- Up to €75,624: 36.97% (bracket 1)
- Above €75,624: 49.50% (bracket 2)
At €40,000 income: employee pays effectively 15-20%, retiree 25-30%. Difference: €4,000-€6,000 less net per year.
Revision interest on stamping off
Revision interest: one-time levy of up to 20% on stamped-off pension, due to prior tax benefit.
Calculation
Example: €400,000 capital, 3 years early, €100,000 stamping off → €20,000 revision interest. Consult with pension fund and Tax Authorities.
NB: Only on stamping off, not on simple early retirement.
The AOW gap in Utrecht
The AOW gap is the period between early pension and AOW (67 in 2024). You miss €1,400 net/month. District Court Midden-Nederland (Vrouwe Justitiaplein 1) handles pension matters.
Tip: Fill AOW gap with savings or part-time work. Calculate via mijnpensioenoverzicht.nl.
Calculation example early retirement pension
Scenario: Stop at 64 (3 years before AOW), €40,000 gross pension.
| Work until 67 | Early to 64 | |
|---|---|---|
| Gross income | €40,000 | €34,000 (-15%) |
| Employment allowance | €5,052 | €0 |
| AOW | €15,000 | €0 (3 years) |
| Revision interest | €0 | -€10,000 |
| Net annual income | €38,000 | €27,500 (-28%) |
Average 28% income drop.
Legal advice Utrecht
- District Court Midden-Nederland: Vrouwe Justitiaplein 1, Utrecht – Pension disputes
- Juridisch Loket Utrecht: Catharijnesingel 55 – Free advice
- Tax Authorities Utrecht: For revision interest and tax return
Action plan:1. Request pension overview2. Calculate revision interest3. Simulate net income4. Consult Juridisch Loket