Decumulation After Retirement for Belgian Investors

📅 Last updated: 8 May 2026
 ·  🏷 Topic: Decumulation, 4% rule, retirement portfolio
 ·  🇧🇪 For: Belgian retirees

At retirement, the goal of your investment portfolio changes: from building wealth to drawing it down while making it last as long as possible. This is called decumulation.

The fundamental problem

You have built up a retirement capital of, say, €500,000. It needs to last 20-30 years, while it:

• Withstands inflation (€500k today = ~€275k in 2055 purchasing power at 2.5% inflation).
• Withstands market drawdowns without forcing you to sell at the wrong time.
• Generates spendable income for your standard of living.

The 4% rule

Research (Trinity Study, William Bengen) suggests that 4% per year can be safely withdrawn from a diversified portfolio (60/40 stocks/bonds) for 30 years.

Concretely: €500,000 portfolio × 4% = €20,000/year withdrawal (indexed for inflation).

Problem: the rule was developed in a period with higher bond yields. Recent research (Morningstar 2024) suggests 3.3-3.8% is safer in a low-rate environment.

The bucket strategy

A popular decumulation approach for Belgians:

Bucket 1 — 1-2 years of expenses (cash + short-term bonds):
– For immediate expenses, no fluctuations.
– E.g. €40,000-50,000 in a savings account + 1-year OLOs.

Bucket 2 — 3-7 years of expenses (medium-term bonds + dividend stocks):
– Stable cash flow, limited volatility.
– E.g. €100,000-150,000 in a bond ETF + dividend stocks.

Bucket 3 — 7+ years of expenses (world index ETF):
– Long-term growth, carries the inflation risk.
– E.g. €300,000-350,000 in a broadly diversified equity ETF.

Drawdown: withdraw from Bucket 1 for monthly expenses. When Bucket 1 runs low, refill from Bucket 2 (in good equity years); Bucket 2 is refilled from Bucket 3.

Belgian context: pension pillars

At retirement you typically receive:

• Pillar 1 (statutory pension): monthly, indexed.
• Pillar 2 (EIP/group insurance): typically as a capital sum at retirement age.
• Pillar 3 (pension savings): an 8% anticipatieve heffing is levied at age 60 (this is not a payout — capital pays out at the effective retirement age). Contributions remain deductible through the calendar year you turn 64.
• Pillar 4 (private investments): what you manage in this article.

Strategy: decumulate Pillar 4 to cover the “gap” between the statutory pension + expenses.

Taxes during decumulation

On sale of equity ETFs from 1 January 2026:
– 10% capital gains tax above the €10.000/jaar exemption, with a €1.000/jaar carry-forward (max €5.000 cumulative).
– Step-up basis: cost basis is the value on 31 December 2025.
– In practice: for someone withdrawing €20.000/year → typically below the exemption if the realised gain component is phased in.
– Belgian-licensed brokers must withhold automatically from 1 June 2026; foreign-broker users self-declare via personenbelasting.

On dividends:
– 30% withholding tax (roerende voorheffing) — automatic with a Belgian broker.
– The €833 dividend exemption per person (reclaimed via the tax return) applies to direct shares only — Belgian and foreign — and EXCLUDES ETFs/ICBs (art. 21, al. 1er, 14° CIR/WIB92).

Optimisation:
– First years: primarily draw down cash + bonds (no capital gains).
– Equity portion: sell later gradually, spread across years to make optimal use of the exemption.

Allocation: keep 30-50% in equities?

A common mistake: putting everything in bonds at 65. Problem:
– Expected 25-year lifespan → inflation can halve purchasing power.
– A bonds-only portfolio rarely keeps up with inflation.

Recommendation: hold 30-50% equities, even in retirement. Source: Vanguard, FIRE research, Bengen research.

🔗 See Asset allocation by age(NL) and 4% rule context(NL).

The €10,000 exemption is annual, per person, and lapses

Withdrawal-rate rules of thumb are drawn largely from US research and say nothing about Belgian tax. The mechanic that most changes an optimal decumulation sequence here is simple: the capital-gains exemption is €10,000 per person per calendar year, and any unused portion is lost.

Three consequences follow:

• Spread realisations across calendar years. Selling €30,000 of gains in one year wastes two years of exemption. Selling €10,000 in each of three years may fall entirely within it.
• Use both partners’ exemptions. For a couple holding assets individually, two exemptions are available — but only on assets each actually owns. Ownership set up long before retirement determines what is possible at drawdown.
• Sequence matters as much as rate. Which asset you sell first — and whether it is a fund with bond exposure caught by the Reynders tax — can matter more to the after-tax result than the withdrawal percentage.

A practical order

1. Cash and the exempt tranche of a regulated savings account first — no realisation, no levy.
2. Distributing positions next: the income arrives anyway and is taxed at 30% whether or not you spend it.
3. Accumulating positions, sized to the annual exemption, realising roughly €10,000 of gain per person per year where possible.
4. Bond funds last if practical, since the Reynders charge applies to the interest component regardless of the exemption.

None of this replaces advice on your own position — but a plan built only on a withdrawal percentage will leave money on the table in Belgium.

Sources

1. Trinity Study — Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable (1998)
2. Morningstar — Updating the 4% Rule (2024)
3. Vanguard — Decumulation research

Continue reading

investnow.be › Beleggen

Real-Estate Crowdfunding in Belgium

Belgian real-estate crowdfunding (Beebonds, Bolero Crowdfunding, Look&Fin): yields, default rates, FSMA oversight and how it stacks up against REITs.

investnow.be › Pensioen

EIP / Group Insurance Explained for Belgian Investors

EIP (group insurance) in Belgium: how the 2nd pillar works, employer/employee contributions, vesting, and what to do at retirement.

investnow.be › Beleggen

IWDA vs VWCE 2026: Which ETF Wins for Belgian Investors?

IWDA vs VWCE for Belgian investors: developed-only vs all-world, TER, withholding-tax leakage, TOB rate, and which to pick in 2026.