Retirement savings adequacy of the Dutch self-employed without employees

This paper analyzes wealth accumulation of Dutch employees and self-employed workers without employees. We consider public and occupational pension entitlements, individual private pensions, saving accounts, stocks, bonds, business assets and housing wealth. We find that a large proportion of the self-employed without employees have occupational pension entitlements, but the amounts are significantly lower than for employees. Private savings and housing wealth are on average higher for the self-employed without employees than for the employees. The role of individual private pension plans seems modest.
The average gross replacement rate, when we take all wealth components into account, is 76% for the self-employed households. For households with only employees this is 83%. The spread in replacement rates is clearly larger among the self-employed without employees than for the employees. For low income households there is little difference between the self-employed and the employees (for this group, public pension benefits are sufficient to maintain living standards), but for all other income groups self-employed without employees have lower replacement rates than employees and are more often falling short (43% versus 31%).

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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