5 ms·

What a puff piece. I am the proud owner of both a Dutch pension and an American 401k. I much prefer the American 401k. If only because I don't have to pay 15%

What a puff piece. I am the proud owner of both a Dutch pension and an American 401k. I much prefer the American 401k. If only because I don't have to pay 15% front loaded commissions everytime money gets put into a fund. I had to claw and fight with my Dutch pension company to even understand how much of my contribution they were taking on their front loaded mutual funds. And the sad part was that most of my Dutch colleagues didn't even understand why I was so upset about it. Another thing that sucks about the Dutch pension system is that once I hit 65 I'm forced to buy an annuity with it. Most likely my pension company will trick most people into buying an annuity directly from them, but I do have the option of shopping around. Work for multiple companies, get multiple pensions and multiple annuities. There are options for rolling over one pension into another. But nothing as straight forward as a TIRA, and nothing where you can choose what funds are actually held. I was told by an independent Dutch pension expert that my Dutch pension is standard, so my case isn't an outlier.

nodata 12y ago
15% upfront forever, or 2% fund total per year like in the UK?
- smutticus 12y ago
  It was 15% upfront, then typical mutual fund charges of 1-2% per year. Still terrible compared to Vanguard.
  - nodata 12y ago
    Upfront PLUS yearly 1-2%? Ouch.
wsc981 12y ago
As a Dutch freelancer, I will avoid collective pension funds like the plague. I'm quite certain that once I reach the age of my retirement (70?), there will be very little money, if any, left in the collective funds. The biggest issue with the Dutch pension system is that one doesn't safe for himself / herself, but instead pays for the current elderly people. With more and more elderly people and less and less workers, eventually this system won't be sustainable anymore. Dutch people should watch this informative movie: http://www.dumpert.nl/mediabase/6576741/e81f2c3e/beste_pensioenstelsel_ter_wereld_uitgelegd.html http://www.dumpert.nl/mediabase/6576741/e81f2c3e/beste_pensi...
- davedx 12y ago
  I'm also a NL resident freelancer. I've just started putting money into index trackers as I have very little to speak of with respect to normal pensions. Any advice? I'm mid-thirties.
  - wsc981 12y ago
    I've only started freelancing since the start of 2014, so I'm still trying to figure things out. Some of my plans are: - Buying an expensive house at a nice location, which hopefully will sell for a nice price when I'm older and also will reduce the income tax I have to pay. - There are certain savings options that are only taxed once you make use of said savings. I.e.: these kinds of savings may be reduced from your income, which will reduce income taxes you have to pay. - I will probably buy some stock. The house is highest priority for me at the moment though.
  - smutticus 12y ago
    Find a competent tax guy that understands both US and NL tax law. I can recommend someone that I used and liked. Msg me if interested. The Belastingdienst doesn't recognize Roth IRA's as retirement accounts, but one trick is to own an REIT ETF in it which they'll count as foreign real estate which is non-taxable. There are many tricks, find a competent guy who can help you. Don't try and do it yourself.
ahh 12y ago
They're not comparing Dutch pensions to your defined-contribution plan, but to American defined-benefit pensions, which you don't have. Why not? Because it's essentially illegal for anyone to offer one to you without funding it like the Dutch do...except for government pensions. Personally, I would prefer, as you do, my own defined-contribution 401K, which I invest heavily into low-cost index funds. But I'd much rather have a Dutch-accounted, actually paid for pension instead of a Calpers-like pension where I have an absolute claim...to money that will never actually get put into the system. The Dutch way is a hell of a lot less bad.
- smutticus 12y ago
  I read the article again and I think you're right. I think there's some linguistic confusion here. The Dutch word pensioen regularly gets translated into 'retirement account', or somesuch. Whereas, and as you state, there are specific varieties of these in both the NL and USA. As an American who speaks Dutch and worked in the NL for a long time, I regularly played this language game when talking about retirement. Unfortunately TFA wasn't really clear to me WRT to these distinctions. It could have been more explicit.

nodata 12y ago

15% upfront forever, or 2% fund total per year like in the UK?

smutticus 12y ago
It was 15% upfront, then typical mutual fund charges of 1-2% per year. Still terrible compared to Vanguard.
- nodata 12y ago
  Upfront PLUS yearly 1-2%? Ouch.

wsc981 12y ago

As a Dutch freelancer, I will avoid collective pension funds like the plague. I'm quite certain that once I reach the age of my retirement (70?), there will be very little money, if any, left in the collective funds. The biggest issue with the Dutch pension system is that one doesn't safe for himself / herself, but instead pays for the current elderly people. With more and more elderly people and less and less workers, eventually this system won't be sustainable anymore. Dutch people should watch this informative movie: http://www.dumpert.nl/mediabase/6576741/e81f2c3e/beste_pensioenstelsel_ter_wereld_uitgelegd.html http://www.dumpert.nl/mediabase/6576741/e81f2c3e/beste_pensi...

davedx 12y ago
I'm also a NL resident freelancer. I've just started putting money into index trackers as I have very little to speak of with respect to normal pensions. Any advice? I'm mid-thirties.
- wsc981 12y ago
  I've only started freelancing since the start of 2014, so I'm still trying to figure things out. Some of my plans are: - Buying an expensive house at a nice location, which hopefully will sell for a nice price when I'm older and also will reduce the income tax I have to pay. - There are certain savings options that are only taxed once you make use of said savings. I.e.: these kinds of savings may be reduced from your income, which will reduce income taxes you have to pay. - I will probably buy some stock. The house is highest priority for me at the moment though.
- smutticus 12y ago
  Find a competent tax guy that understands both US and NL tax law. I can recommend someone that I used and liked. Msg me if interested. The Belastingdienst doesn't recognize Roth IRA's as retirement accounts, but one trick is to own an REIT ETF in it which they'll count as foreign real estate which is non-taxable. There are many tricks, find a competent guy who can help you. Don't try and do it yourself.

ahh 12y ago

They're not comparing Dutch pensions to your defined-contribution plan, but to American defined-benefit pensions, which you don't have. Why not? Because it's essentially illegal for anyone to offer one to you without funding it like the Dutch do...except for government pensions. Personally, I would prefer, as you do, my own defined-contribution 401K, which I invest heavily into low-cost index funds. But I'd much rather have a Dutch-accounted, actually paid for pension instead of a Calpers-like pension where I have an absolute claim...to money that will never actually get put into the system. The Dutch way is a hell of a lot less bad.

smutticus 12y ago
I read the article again and I think you're right. I think there's some linguistic confusion here. The Dutch word pensioen regularly gets translated into 'retirement account', or somesuch. Whereas, and as you state, there are specific varieties of these in both the NL and USA. As an American who speaks Dutch and worked in the NL for a long time, I regularly played this language game when talking about retirement. Unfortunately TFA wasn't really clear to me WRT to these distinctions. It could have been more explicit.