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6 things to know about your future pension as a self-employed individual

3 min

If you're starting out as a self-employed individual, you probably know that your future pension will be lower than that of an employee. But what else do you know about the topic? Here are six key points to keep in mind.

1. Legal pension for self-employed individuals: what are the differences with employees?

The legal pension for self-employed individuals, i.e. the first pillar that the state will pay you after you've paid your social security contributions, is generally lower than for employees. This is mainly because the amount of social security contributions paid by self-employed individuals is usually lower than what employees pay.

The factors considered in both systems are the same, however: income, career length, and family situation. But it's the way these factors are taken into account that differs. For example, the gross salary is taken into account for employees' pensions. For self-employed individuals, it's the net salary, obtained after deducting professional expenses and social security contributions, which is necessarily lower than the gross salary.

Estimate the amount of your self-employed pension.

2. When can I retire?

In 2024, the legal retirement age is 65. It will increase to 66 in 2025, and then to 67 in 2030. Do you want to work beyond this limit? That's possible. And this period of work for which you pay contributions will also be considered when calculating your pension.

3. Minimum and maximum pensions for self-employed individuals: what are they?

Have you worked and contributed for at least 30 years? You're entitled to a minimum pension. If the result of your pension calculation is lower than this minimum amount, it will be increased to reach it. In May 2024, this minimum threshold was €1,773 per month for a single person.

However, be aware that this amount applies to a full career of 45 years. So, if you've worked for 37 years, for example, you'll receive 37/45 of the minimum pension amount.

On the other hand, your self-employed pension cannot exceed a maximum amount, regardless of your salary. In May 2024, this maximum amount was €2,071 for a single person.

4. Mixed career and pension: what's the impact?

A few years as an employee, followed by a career as a self-employed individual and vice versa: more careers are mixed. And this inevitably affects how your pension is calculated. The pension calculation is then performed in both the employee and self-employed systems, considering the length of your career and your salary in each system. The amounts are then added together.

5. Can I buy back my years of study?

Vos années d’études peuvent-elles entrer en ligne de compte pour le calcul de votre pension ? Oui, mais ça implique que vous les rachetiez, sur la base du principe de période d’études assimilées. La conséquence de ce rachat ? Le nombre d’années pris en compte pour calculer votre pension augmente, et donc le montant de votre pension d’entrepreneur·e aussi. Mais ce rachat de vos années d'études ne vous permet pas de partir à la pension plus tôt.

Can your years of study be considered when calculating your pension? Yes, but this means you'll need to buy them back, based on the principle of assimilated study periods. The result of this buyback is that the number of years taken into account for calculating your pension increases, and therefore the amount of your self-employed pension also increases. However, buying back your years of study does not allow you to retire earlier.

6. Supplementary pension and second pillar: why?

Your self-employed pension may not be enough to maintain your current standard of living... just like for employees. Thanks to supplementary pensions from the second pillar, you can save to supplement your legal pension while benefiting from a significant tax advantage. In other words, you can deduct up to a certain limit the amount you save for your pension from your taxable income. This will automatically reduce your taxable base, and therefore the amount of your taxes and social security contributions. There are supplementary pension solutions tailored to self-employed individuals, such as the Supplementary Pension for Self-Employed Individuals (PLCI). Others are dedicated to company directors, such as the Individual Pension Commitment (EIP).