The self-employed, employees and civil servants can buy off their years of study to top up their statutory pension. Currently, this can be done at a favorable rate, but as of December 1, buying off years of study will become a lot more expensive. Potentially interested parties should therefore not wait too long. Below, the redemption regime and the corresponding price tag for employees and the self-employed are explained once more for you. A different regime applies to civil servants.
What can employees and the self-employed buy out?
For the time being, the following study periods can be redeemed at a favorable rate:
- The years of higher education for which you obtained a diploma or certificate are limited to the years located after January 1 of the year of your 20th birthday. However, if you have had to repeat one or more years of study, you cannot redeem these additional years.
- The years of study in the context of a doctoral thesis, limited to a maximum of 2 years.
Please note: By buying off years of study you can increase your pension amount once you are entitled to a pension, but you cannot shorten your career in order to get a pension sooner. So buying years of study does not allow you to retire earlier, but it allows you to receive a higher pension amount once you are entitled to take your pension.
What does it cost?
Today, a favorable regime is in place: employees or self-employed persons who obtained their diploma before December 1, 2007, can redeem their years of study as from their 20th birthday at a fixed amount of 1,560 EUR per year of study until November 30, 2020. In return, they receive an increase of their gross pension of 277.44 EUR if it is a single person's pension, and 346.80 EUR if it is a family pension.
As of December 1, 2020, one will only be able to redeem academic years at this favorable lump sum if one redeems them within 10 years after graduation. If you want to redeem years of study outside this period, the redemption will be at a higher rate.
But is it also interesting?
Whether buying off years of study is also worthwhile depends on the income bracket in personal income tax. The surrender sums are tax deductible at the marginal rate. Self-employed people therefore benefit from a double advantage: they enjoy a saving in personal income tax and a saving in social security contributions because the deduction of the surrender sums also reduces the basis for calculating social security contributions. The lower the tax rate, the smaller the effect.
Of course, the question remains what exactly one will be left with net from this gross pension increase. That depends on various tax and pension factors. For example, it is quite possible that the above gross increases will barely give you anything net. So buying off years of study is not interesting for everyone. At www.mypension.be you can calculate the impact free of charge.
Don't hesitate to contact your customer service representative if you have questions about commuting or other solutions to increase your pension. You can reach us at any time on 051 26 82 68 or by email to info@titeca.be. .
