Early retirement reduces survivor's pension for tax purposes; supplement with insurance policies to protect dependents against income loss.
When opting for early retirement, survivor's pension rights decrease significantly, with lasting tax implications. The standard survivor's pension amounts to 60-70% of your accrued pension; early retirement reduces this by 5% per year. Tax implications: Payments fall under Box 1 of the survivor's income tax, potentially subject to inheritance tax. Tips: Supplement through a survivor's pension insurance policy or save in a tax-efficient manner in Box 3. Regulations will change in 2025 under the Future of Pensions Act. Example: Retiring 3 years early results in the partner losing €300 net per month for life. Review your policy and calculate using online tools. Opt for risk coverage with flexible pension arrangements.