Is a lijfrente worth it compared with investing in Box 3?

Where the gain comes from

A lijfrente (pension pillar 3) is a pension you arrange yourself. What you put in comes off your taxable income, the balance isn't counted for Box 3 (the tax on savings and investments) while it grows, and the payouts are taxed later. For 2026 you can put in up to €35,589, depending on your Jaarruimte.

The Lijfrente guide explains the rules.

Compared with investing the same money yourself, a lijfrente can leave you better off in three ways:

• The tax gap. You get tax back now at your highest rate, and pay tax on the payouts later, often at a lower rate. Your income usually drops once you stop working, and from your AOW age the first tax bracket falls from 35.75% to 17.85% because you no longer pay the AOW premium.
• No Box 3. Money you invest yourself pays Box 3 every year once your savings and investments are above the tax-free amount, €59,357 a person in 2026. In 2026 Box 3 assumes investments return 6% and taxes that at 36%, so it takes 2.16% of their value a year.
• The payouts can pay for the years before your AOW. You choose when the payouts start, so they can start when you stop working and pay for part of the Pension Bridge, the years until your AOW and pension through work start.

€10,000 in a lijfrente, or in Box 3

Take a made-up couple, 36 and 34, who earn €73,000 and €61,000 a year before tax. The first partner has a taxable income of €68,000, in the second tax bracket. They put €10,000 into a lijfrente once and leave it for 20 years. Their tax goes down by €4,396: 37.56% for the bracket, and 6.398% more because their general tax credit (algemene heffingskorting) is phased out on income above €29,736, and the deduction gives part of it back. So the lijfrente costs them €5,604.

The other choice is to invest the same €5,604 themselves. Both grow at 5% a year, and the lijfrente costs 0.4% a year more than holding the same funds yourself, about what a low-cost bank charges.

Box 3 takes 2.16% of the value every year, which leaves a 5% return at 2.84%. Over 20 years that leaves a third less than the same money would have grown to without it.

What's left of the lijfrente depends on the tax on its payouts. If your savings are above the tax-free amount, the lijfrente comes out ahead unless the payouts are taxed at more than 60%. If you're under the tax-free amount, so you'd pay no Box 3 anyway, it only wins if the payouts are taxed at less than about 40%: the 44% you got back, minus what the extra cost took.

The same couple, over their whole plan

Over a whole plan, the payouts are taxed together with the AOW and pension, Box 3 comes off every year, and the money stays locked until it pays out. That also shows what a single comparison misses, such as money you'd need to stop when you want to but can't touch.

The couple have €140,000 in savings and investments, and would like to spend €48,000 a year once retired, after tax and in today's euros, not counting the mortgage: that's their budget. Their savings have to last until the younger of them is 90. Without a lijfrente they could both stop in 2042, at 52 and 50. The first partner has a Jaarruimte of €6,500 this year and €20,000 of Reserveringsruimte, room left over from earlier years.

The same lijfrente does much less if it pays out on top of the AOW and a pension. If the household kept working until 2057, when they're 67 and 65, putting in the full Jaarruimte every year (and the €20,000 now) would raise their budget once retired by €6,900 a year. But the payouts would then be taxed at 37% on average, against 39% back on what went in. Almost all of the gain then comes from the Box 3 the money doesn't pay.

When investing in Box 3 does better

• You need the money before the payouts start. A lijfrente is locked until it pays out. Cashing it in early is taxed as income, with 20% revisierente on top. Money you'll need for a home, a gap between jobs or the first years after you stop is better kept where you can reach it.
• The payouts land in the ouderenkorting band. From your AOW age you get an extra tax credit, the ouderenkorting, which is phased out on income above €46,002. In that band each extra euro of payout is taxed at about 60%, more than you got back when you put it in. The tax after AOW age guide shows where the band starts and ends. Someone with a large pension through work can end up there.
• You're under the Box 3 tax-free amount. Then the lijfrente has only the tax gap to win on, and a small gap doesn't pay for its costs.
• You get little tax back now. On a taxable income under €29,736, the tax you get back is 35.75%, the lowest rate.

One cost is easy to miss: the payouts pay the 4.85% Zvw, but putting money in doesn't save it, because on your wages your employer pays it.

Toeslagen and the Box 3 reform

Benefits (toeslagen). Childcare benefit, the child budget and healthcare benefit depend on your toetsingsinkomen, which for most people is the verzamelinkomen on their tax assessment. A lijfrente deduction lowers it, so in a year you get one of these, the benefit can go up. That's a gain on top of the tax back.

The Box 3 reform. The government wants Box 3 to tax your actual return from 2028, and under its latest plan the gain on shares and funds would be taxed only when you sell. If that becomes law, investing yourself gets cheaper, and a lijfrente saves you less Box 3 than it does today. It isn't law yet: the Box 3 reform guide says where it stands. The example above uses the 2026 rules for every year.