Two weeks ago I wrote a post about the Dutch Pension system (If you haven’t read it: Dutch Pension System). While writing this post and the comments I got (on the site and by mail), I decided to write a post about my personal pension situation. So here are my possible retirement dates. Hopefully more bloggers will do the same, so we can learn from each other.
As I wrote in my earlier post, we have in The Netherlands 3 pillars in our pension fund. So I looked up the numbers for my state pension and for my company pension (ABP) (The first and second pillar). Fortunately my company pension has a great website, which allows me to see my pension at different ages.
For the third pillar of my Pension system I have my well-known Vrijheid Fonds. So I did some calculations for my Vrijheid Fonds to determine future values.
But before I show you my numbers, I have to disclose some conditions that I have used in my calculations. And I will use these conditions again every year, to show my progress.
All the amounts I present here are net amounts. As already mentioned for my state pension and company pension I have used the numbers from my personal website of my company pension. The amount of the state pension depends on numerous factors. In these calculations I used the numbers for the state pension as provided by my company pension fund.
To determine the future value of my Vrijheid Fonds I have used the following conditions.
- Annual donation of fresh capital: € 6,000
- Average Dividend Yield: 2.8%
- Annual gain: 2.2%
- Dividend Growth Rate: 6%
Therefore the annual ROI will be: 11%
I have calculated the Future Value for 4 specific dates.
- Present date
- Date when I’m 60
- Date when I’m 65
- Date on which my State Pension will start
At this moment the legal age on which our State Pension will be paid is around 66 years. However the State Pension depends on the average life expectancy. In my case it will be around 70 years ;-(.
|Year||State pension||Company pension (ABP)||Vrijheid Fonds||Total||Coverage of total expenditures|
|€||€||Value||Dividend||Net per month||%|
Table 1. Overview of my possible retirement dates
If I retire from my job at age 60, this of course will affect my pension. I will receive €1,660 net a month from then on till I turn 70. From then on my company pension will be 1,440 and the state pension will then be € 720 net a month.
If I retire from my job at age 65, this of course will affect my pension. I will receive €2,370 net a month from then on till I turn 80. From then on my company pension will be 2,370 and the state pension will then be € 470 net a month.
As you can see, with these conditions, I can retire around the time I turn 60. So still a long time to go! And this is approx. 20 years after I started as a DGI. This corresponds to the textbook examples of compound interest of a stock portfolio.
One little note: When I turn 65 my mortgage will be zero. So my expenditures will be lower from then on. Of course I try to lower my mortgage debt every year.
What are your possible dates for retirement? How do you calculate the Future Value of your portfolio? I like to hear from you.
Thanks for reading.