Tax after AOW age: why the same pension is taxed less

What changes at your AOW age

Your pensions are taxed in Box 1: tax on income from work and your home. The AOW (state pension), your pension through work (pillar 2) and a lijfrente's payouts are all Box 1 income, added up for the year. The income tax guide explains the boxes.

The rate in the first bracket is two things together: income tax, and premiums for the national insurances (volksverzekeringen). The biggest of those premiums pays for the AOW. From your AOW age you get the AOW instead of paying for it, so its 17.9% drops out of the first bracket. The other brackets stay the same:

So on the first €38,883 of your income, the tax before credits is about half what it was before your AOW age.

In the year you reach your AOW age, the first bracket's rate is between the two. It depends on the month: reach your AOW age in July 2026, and the rate for that year is 26.8%. The AOW guide gives your AOW age by date of birth. People born before 1946 have a slightly longer first bracket.

One thing doesn't change: the income-related health insurance contribution (bijdrage Zvw). On a pension, the AOW and a lijfrente's payouts you pay 4.85% of them, up to €79,409 of income, before and after your AOW age. While you work, your employer pays it instead.

The ouderenkorting

Tax credits (heffingskortingen) come off the tax the brackets give, not off your income. From your AOW age, two of them change:

• The general tax credit (algemene heffingskorting) is about half: at most €1,556 in 2026, instead of €3,115. It gets smaller as your income rises above €29,736, and is gone above €78,426.
• The older persons' tax credit (ouderenkorting) is new. It's €2,067 if your income is up to €46,002. Above that it gets 15% of the extra income smaller, and it's gone above €59,782.

If you get the AOW for people living alone, or are entitled to it, you also get the alleenstaande ouderenkorting, €540 in 2026. The labour tax credit (arbeidskorting) stops, unless you still work.

The income that counts for both credits is your verzamelinkomen: your Box 1 income plus your Box 3 income, the return the tax office assumes on your savings and investments. So large savings can shrink your ouderenkorting even when your pensions are small.

The tax on each extra euro

Because the credits get smaller as your income rises, the tax on an extra euro of pension isn't only the bracket's rate. From your AOW age, in 2026, with the 4.85% Zvw contribution added:

Between €46,002 and €59,782, about 60 cents of each extra euro goes to tax and Zvw: more than in the top bracket. That band is where the ouderenkorting phases out. Above it, the rate drops again.

What the example household pays

Straks follows one made-up household through every guide, so the numbers here match the calculator.

Neither partner reaches the 60% band. If the first partner added €10,000 a year from a lijfrente, their income would be €38,240, still in the first bracket, and they'd keep €7,458 of it after tax and Zvw. With €30,000 a year from a lijfrente, they'd be well into the ouderenkorting's phase-out, and keep €16,628 of it: 55%.

Why the calculator asks for gross amounts

Your pension fund and mijnpensioenoverzicht.nl, which lists every pension through work you've built, show pensions gross (before tax). That's because the tax depends on everything else you get that year. Your pension on its own might be in the first bracket, but added to your AOW and a lijfrente, part of it can land in the ouderenkorting's phase-out.

So Straks asks for each amount gross: your AOW, each pension through work and a lijfrente's payouts. For each year, it adds them up per person with that person's share of the Box 3 income, and works out the tax with the rates for their age, the credits and the Zvw. What's left is your net income once retired. A net figure from one fund would count its tax as if it were your only income. The pension statement guide shows which figure to copy.

Straks doesn't count the alleenstaande ouderenkorting, and uses the full-year rates from your AOW age, not the mixed rate of the year you reach it.

What it means for a lijfrente

A lijfrente (pillar 3): your own pension savings, with tax back now. What you put in comes off your Box 1 income while you work, often at 37.56% or 49.5%. The payouts are taxed later, and from your AOW age the first €38,883 costs about 26% with the Zvw. That difference is where much of a lijfrente's gain comes from.

It only works if the payouts stay out of the expensive band. Paid out on top of a large pension, a lijfrente can be taxed at 60.6%: more than you got back when you put it in. You can spread the payouts over more years to keep each year's income lower. The Lijfrente guide explains when and how it pays out.