Old age pension
In the Netherlands the target is building up an old age pension, including AOW, of 70 percent of the final gross wages earned. This means that the net wages after retirement will be about the same, because after age 65 people pay lower rates in the first two tax brackets and they no longer have to pay pension premiums.
In accordance with the VPL law (dealing with early retirement, prepensions and life course regulations) the pension funds have cut the options for early retirement and prepensions in recent years, especially for employees born after 1950. However, employees who keep working in their current job until the age of 65 can build up more pension rights. Pension benefits paid before the age of 65 in the old system, will now be used to pay higher benefits after 65.