Feathering the nest: The Bulletin's guide to retirement in Belgium

Although most of us face retirement at some point, it’s surprising how little time we spend preparing for it. Expats face the additional challenges of not necessarily knowing which country they will retire in, as well as having to keep track of their pension and other financial assets. Belgium may not be a dream destination, but it does attract a growing number of retirees. We talk to two expats and a local lawyer about the pros and cons of retiring here.

Richard Condon came from London to Brussels more than 30 years ago to work for the European Commission. He and his wife weren’t expecting to stay, yet in 1982 they bought a home in Schaerbeek and haven’t moved since. His wife is a retired English teacher, and he retired in 2008. “We’ve gone native,” he says. “I have more Belgian than British friends and am very involved in the local community.” This has increased since his retirement, he says. “I’m a member of Amnesty International and am trying to get my community to join in, and I’m involved with the local Ecolo green party.” With his compatriots, he regularly has lunch with a group called the Ancient Brits.

“We thought we’d leave Brussels when I retired,” he says. “If our kids had ended up in the UK, maybe we’d have followed.” Their children haven’t settled in Belgium either, so what made them stay? “Brussels is a good place to live,” he says. “We’re ten to fifteen minutes from the centre, so we can go to concerts or the opera, and walk home on nice nights. Transport is cheap for seniors: a yearly subscription for all Brussels public transport is €60 and we can go anywhere in Belgium by train for €6. The cost of property is low, its quality and size is great. The healthcare is good. Not many cities offer all this.”

Condon receives an EU pension, taxed by the EU; his wife, who taught English at international private schools, receives a Belgian pension. “It’s pretty small, but she could survive on it,” he says. They also rent out an apartment. In Belgium, he explains, you don’t have to pay tax on rental income if it’s not a business. And managing the apartment has shown him how Belgian public services, utilities and customer service have improved in his time here. “I was scared of retirement,” he says, “but from one day to the next it worked out fine.”

Martin Westlake knows he will retire one day but he’s not sure where. An academic and author, he arrived in Brussels in the mid-1980s with the Belgian he’d eventually marry. “I’m not one of those expats who ‘only came for six months’ and is still here thirty years later because they kept thinking their stay was temporary,” he says.

Their Brussels home is soon to become an empty nest. They will eventually sell it, but it won’t raise enough to make going back to southeast England an easy retirement option. “Here, however, it’s still possible to buy a decent flat for a reasonable price,” he says. And the Eurostar makes teaching at the London School of Economics easy. “I leave my house at 7am and I’m walking down Euston Road two hours later.”

Meanwhile, in many ways, the UK has come to Brussels: English newspapers and shops, Marks & Spencer, the BBC. But Westlake is not obsessed with Britishness. Where he retires, he says, “will depend a lot on what our children end up doing. And on our new ‘careers’.” He’d like to carry on teaching and writing in retirement. While considering staying in Belgium, he and his wife, an artist, are tempted by New York.

Then there’s healthcare. “Once your health suffers your priorities change drastically. Given the state of Britain’s national health service, the Belgian health care system is a reason to stay.” And he’d certainly stay for the people. “I like Belgians – and not just because I’m married to one,” he says. “They’re self-deprecating, don’t take themselves too seriously, and have a good sense of humour.”

For Oonagh Walsh, it’s Belgium’s large and diverse expat community that makes working in Brussels so attractive. But the 55-year-old NGO policy officer plans on returning to her native Ireland on retirement. “It actually has nothing to do with finances,” she says. “I’ve loved being in Brussels for my professional life, but there just isn’t enough here for me to stay on after retirement.” With one child living in the UK, and no partner, she feels that Ireland and her extended family offer a better option. “I know it’s going to be a challenge, but I will throw myself into community life there.”

Although some of her colleagues and friends plan on staying in Belgium, she knows many who are either returning home or moving to other countries. “France or other European countries are quite tempting, but I personally don’t have the energy to start up a new life somewhere else. And that may be because I’m on my own.”

Retirement is a challenging time for many. It’s a period in life when you have to make an honest appraisal of your desires and needs, from finance and family to health and a social life. With healthy pension plans becoming increasingly scarce, one important criteria may be the need to continue to generate some income. For expats, choosing the best place to retire to is just one more hurdle to jump.

Making the numbers add up

Brussels-based international tax lawyer Marc Quaghebeur says remaining in Belgium can make financial sense, “because the tax climate’s not bad if you don’t have to work. Many expats retire here and invest in insur- ance policies or stocks with no capital gains taxes (if kept for at least six months) and dividends subject to a 27% tax or bonds with interest taxed at a fixed rate of 27%.”

Moreover, Belgian complementary pensions are geared to being disbursed in the form of a lump sum with a tax rate as low as 8% when paid out at 65, says Quaghebeur, as earlier retirement means higher rates: 16.5% at 62 to 64, 18% at 61.2% at 60. retirees who withdraw the full pension capital and buy an annuity that covers the rest of their lives will be taxed at a rate of 0.81% of the capital they surrendered.

How are pensions calculated? Based on earnings over a minimum 45-year career, a married couple can receive 75% of their (inflation-adapted but capped) gross annual salary, and an individual 60%. According to the na- tional pensions Office, in 2015, the gross maximum state monthly pension was €2,789.38 for families and €2,238.71 for individuals (the minimum was €1,431.80 and €1,145.80, respectively).

Expat retirees who have worked in more than one European country need to provide their entire career record, via their local commune, to the national pensions Office, which arranges for each country’s pension office to pay its part directly to the retiree. self-employed people without their own company should contribute to a ‘free additional pension scheme’; contributions are tax-deductible (although limited to a few thousand per year) and payout at 65 is taxed favourably. Additional pension saving at a bank or insurance company entitles a retiree to a tax credit on the first €940, which provides a tax saving of 30% or €2,283.

Crucially for retirees, expats who receive a pension and pay social security contributions are entitled to healthcare. inheritance tax rates range from 3% to 30%, says Quaghebeur, who is the author of rest in peace: A guide to Wills and inheritance Tax in Belgium. Officials of the European Com- munities, European investment Bank, nato and the EU as well as other diplomats are exempt except for their Belgian property, so beware that inheritance tax law is based on forced heirship: your estate is divided between your surviving spouse and children.

This article first appeared in The Bulletin Newcomer, spring 2016