Working longer pays off

12 March 2007

BRUSSELS – The government wants to keep us working for a bit longer. And it has introduced some measures to make this appealing, the Standaard reports.

The government is working out a number of “activation measures” that should convince us that staying active for longer can also benefit our wallets. Not just because even a half-time salary often amounts to more than early retirement benefits, but mainly because there will be significant tax incentives in future for working until 65.

An increasing number of workers are looking forward to a significant payout from collective insurance at 60 when they stop working. In many cases it is the employer who pays for the premiums for kind of insurance. When the amount is paid out, workers must pay a one-off tax of 16.5 percent

This tax will now be lowered to 10 percent, but only if the worker continues working to the age of 65. In addition, from the age of 62 workers can continue to receive the pension bonus of 2 euro per day worked. Of course the effect of this bonus will be less, but all in all the advantages of continuing to work will quickly amount to tens of thousands of euro.

For a worker aged 60 who gets 3,500 euro gross monthly, and is expecting a payout of four times his most recent gross salary paid out, continuing to work half time until the age of 65 will yield 72,000 euro more than retiring at the age of 60.

PriceWaterhouseCoopers (PWC) calculated these figures based on the new government measures.

Subject: Belgian news