This is how young people think about retirement
Young workers (under 35) seem to care less about their retirement benefits. But is that really the case? We asked four young people: Annelies (27), Job (33), Agnes (28) and Dionne (28).
“I know very little about it”
Annelies Rijstenberg (27) has her pension invested with a high risk. For the past three years, she has been working as a consultant for project management and risk management for projects related to infrastructure and mobility at phbm, an consultation firm for projects related to infrastructure and mobility. “When I applied here, I was not thinking about a pension plan,” she tells us. “I took it for granted that there was one. I didn’t know it was not something automatic.” Every once in a while, her employer invites someone to come and speak about pensions. Annelies knows something about it now, but not as much as she would like. “ The man that came, explained that you can invest with a low, medium and high risk and that when you’re young, you don’t have a lot to lose, because you haven’t accumulated a lot of pension yet. So, I opted for investing with the maximum risk. For the rest, I don’t really know what it all means, to be honest. I blindly relied on him. It is so abstract, I tend to think: here’s someone who knows about this, so it’s probably ok. Now that I say that, I think: good job, Annelies. Usually I want to know all the risks, and this is my work after all.”
Uncomfortable subject
Annelies’ boyfriend just started a job with no pension plan. “We were just talking about this recently. For him it’s not an issue that his new employer doesn’t have a plan, but he was kind of thinking: Shit, now what? He’s 32 and now he has to figure out his own pension plan. It is an uncomfortable subject. It all sounds so far away, but at the same time, time flies.
After our talk, I decided to take a look at what I have accrued so far. If I keep working like this, I will be getting about € 2000 a month in the future, including OAP. And that’s not very much. And it remains to be seen if there will even still be any OAP in 40 years. Everything is pretty uncertain, but that is the gist of it. The more I talk about it, the more I realize that I know very little about it. It feels similar to my student loan. I kept thinking: No problem, I’ll easily pay it off once I start working, but it’s not that easy. Our retirement is far in the future, but you can’t live completely in the moment; you are creating your future. I want to start learning more about it now.”
“Pension plans still feel like an “adult thing”
Job Boodt (33) trains baristas at Bocca Coffee Roasters, a company that roasts coffee and (primarily) supplies the hospitality sector. “I know there is such a thing as pension and kind of how it works, but I wouldn’t be able to tell you right off the bat what kind of pension plan I have, what kind of consequences it will have and whether I should adjust my career and lifestyle for it,” he says. “Pension plans still feel like an ‘adult thing’, but I’m realizing now that it’s about time for me to start thinking about it.”
When he started working for this company four years ago, the pension plan was the last thing he was thinking about. “This job is the result of a career switch. My goal had been to work for a company where I could learn as much as possible. For my happiness in life, the direction of my career and the company I work for is more important than knowing exactly how many Euros I’m getting over a certain number of years. For me, that is not a deciding factor.”
The future? No idea
He doesn’t know how much he will get per month in the future either. “The last time I saw any figures about that was when I was still working in the hospitality sector. I think it was about twenty bucks a month, or something; hopefully it’s a bit more now. I don’t actually have any idea. I don’t know anything about the coverage ratio either. I get an email from them once in a while, with information about my pension. I look at them, but I don’t see a lot of info that tells me very much. I think it’s probably not bad. Everything is well-organized in the Netherlands. But maybe that’s a false sense of security. I don’t think I’ll be getting a great deal of money in the future either.”
Inheriting a nice sum
He believes his contemporaries don’t think about money for the future as much as previous generations. “Nowadays, there are more people that are going to inherit a nice sum from their parents. I have parents that worked hard too; I know for sure that there will be something for me when they’re gone.” Will he be paying more attention to whether a job comes with a good pension plan or not when applying for jobs in the future? That depends on the job, he says. “I work in a fairly specialized field; it’s not like I get to choose from a bunch of different employers.”
“All his pension savings are gone. I am not entitled to anything”
Truck driver Agnes Visser (28) never gave much thought to her pension, but since her boyfriend died, she knows how important it is to set up something for it. If you die before your pension goes into effect, your partner and kids are often entitled to a survivor’s pension. But if you’re not married and you’re not registered partners, you have to register your partner with the pension administrator yourself. In their case, this was never done. “My boyfriend suddenly died from a heart attack,” she tells us. “He was only 34; not an age where you’re thinking about your mortality. So, no, he didn’t have anything set up, in that sense. He had been working as a truck driver since he was 18, so he had accrued quite a bit of pension over the years. But now that’s all for nothing. He can’t enjoy it himself and whatever savings there were don’t go to his parents or to me. Because we were not married, I am not entitled to anything. It’s just gone. That’s harsh; he worked hard for that for years.”
Important to think about it
She wants to warn others about it. “I have noticed that a lot of people in my environment are not aware of any of this. I didn’t know anything about it either. So, if you’re living together, make sure you have a registered partnership. I can’t really think about it yet, but if I do meet someone else in the future, there will be some documentation a bit sooner, with respect to these things. If you’re going to pay into a pension, it’s important to think about this.”
She herself, had a lot of jobs where she didn’t accrue any pension. “I worked a lot as a temp and didn’t really pay attention to pension. I never looked at it when I applied for jobs.” But she has been working as a truck driver for the past three years and she is accruing a pension through her employers. “That is a very reassuring thought, that there will be some income in the future. I haven’t accumulated much yet. I think I get about 400 Euros a month right now, but I want to have a big savings account that I can do what I want with. Something for a rainy day; you can’t go wrong with that.”
“I invest money for my retirement every month”
Dionne Knooren (28) has been working as a freelance online marketer for the past year and a half and is the owner of the platform Ondernemen als een baas (Doing business like a boss), where she writes about her pension, among other things. Before this, she was working at a startup, where she was not accruing any pension. She has been responsible for her pension for some time and she is consciously working on it. “I thought: how can I sustainably invest the money I earn for the future? What is convenient, what is wisdom, how can I ensure I will have enough money later? As a freelancer, you can earn a lot of money, but you also have to take care of a lot of things yourself, including your pension. I started to delve into the options and risks of investing.”
She started with this in 2017, on a small scale, with 50 Euros. Now she invests some money every month. “I earn on average between 8,500 and 10,500 Euros a month. As soon as I pay myself, a portion also goes to the investment account. I buy trackers every month (which, simply put, you can use to buy all the shares of an index, such as AEX, ed.), in which the risk is spread out. When they have increased in value, I will sell them and in this way I have built up a portion of my pension. I currently have about 20,000 invested. My goal is to invest 250 Euros every month; 100 Euros a month is my minimum.”
Investing for the future
She can simply do without the money. “I literally don’t feel like I’m missing anything, putting away this amount. I don’t have to make any big sacrifices and I can do all the things I want to do. I only invest money that I don’t need right now.” In addition to the investment account, she also has a pension account and a CD ladder, where she can’t touch her money for a particular period of time, at a higher interest rate. “Every three months, some of that money is released, which I then put into a new CD ladder.”
In addition, she has bought an apartment in Amersfoort as an investment for the future and she has a passive income of 250 to 450 Euros a month. “I have two websites and blogs and I wrote an e-book about Pinterest marketing. I get money through advertisements and affiliate marketing – where I get a certain amount when someone buys something through me. I also bought a lot of URLs, so that it can still expand. I want to have multiple options. My goal is to have a pension of 2,500 a month later, in addition to my OAP. And, if possible, I’d like to retire early.”
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