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Featured on ING(.be)

Last Updated on April 10, 2019 by Mr. FightToFIRE

I just got featured on ING(.be) [NL][FR]!
They did a small interview with me a couple of weeks ago and it just went live. Unfortunately, it’s only in Dutch and French since the target audience is “younger” Belgian citizens who are thinking (or not thinking!) of saving for (early) retirement.

Featured article on early retirement and the FIRE-movement

ING Belgium performed the interview to highlight the possibility of a nice (early) retirement when you have a solid pension savings plan using the tax advantage.
This tax advantage [NL] [FR] is 30% when you save up to € 980 and 25% if you save up to € 1260. This is a good option if you know you can’t or won’t save enough for later.
Aren’t there any downsides then? While this benefit looks tempting, like with all government incentives, it’s susceptible to the woes of the latest government in power. On top of that, you will also get “fined” 33% (+ community taxes!) of your total investment if you want to withdraw before you turn 60. Because of this tax benefit, the pension funds are strictly regulated which hampers their performance. While the best-performing ones aren’t doing bad (Metropolitan-Rentastro Growth Fintro has a 10-year avg. of 7.8% (2008 – 2018)), most aren’t great and an S&P500 tracker does better for cheaper.

I’m comfortable investing in the stock market, and I’m also more than slightly worried about what future governments might do with this benefit. Since this is the case, I shouldn’t bother with pension saving, yet I still do. It’s because of one reason: I can get additional tax savings through my employer’s cafeteria plan.

Knowing the above, what you should do will depend on your personal situation and how you feel about the above-mentioned attention points.
Take your time to decide what you want by reading the interview and letting me know what you think (apologies to my English readers) ;).

Nuancing

Besides the fact this interview was done in the context of pension saving, I’d also like to add a bit of extra nuance to certain things. To be clear, there is nothing in the article that I didn’t say, just sometimes I didn’t add enough nuance, hence these points:

  1. The statement “25 times your yearly expenses” is correct, but do note it is the expenses on which you want to live. So if you like to have some luxury, e.g., you spend 40K EUR per year, you have to save 1 million EUR.
  2. Yes, I am lucky to have an employer that offers me a subscription for public transport and monthly biking compensation
  3. It should be obvious but just in case, 75% is an average. As my recent quarter shows, it can definitely go well below it.
  4. I said 500K though it will probably be a range of 500K to 600K depending on, well, life. Same with the 1700 EUR per month. This can go up to something like 2500 EUR.

With all of that said, I genuinely want to thank ING (Belgium) for offering this opportunity and exposure and hope you enjoy the little read.

The article

Screen capture of the ING article about FIRE.
Interview with ING about my fight towards FIRE.

I'm a developer for a major financial institution in Belgium that is present in over 40 countries. I have over 8 years of working experience in the development of customer applications focussing on all aspects of banking. This helped me gain a deep understanding of the inner workings of a commercial bank. All of this experience in both banking and life culminates in this blog about personal finance and my fight towards FIRE.

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financialfreedomsloth

Congrats on the interview!

Whendoyouretire did some calculations for pensionfunds at the MMM Forum and his conclusion was that in most cases it wasn’t really that interesting: https://forum.mrmoneymustache.com/meetups-and-social-events/belgian-moustachians/100/

Financial Chipmunk

Nice interview! I must agree with your nuances.. Living off EUR 1.700 is pretty tough. But I’m a bit biased because I take my personal situation into account (wife, 2 small kids, buying your own place etc.).

Kids are a lot of fun but cost a lot of money 😉 I think I can retire comfortably when I have enough to cover EUR 3.000 every month. So that’s a portfolio of about EUR 1 million. But probably EUR 1.2 million just to be safe.

Financial Chipmunk

Fully agree. My (financial) goals evolve over time as well. Yep, EUR 3K a month in passive income will be awesome 😉 Good luck!

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