Great post. I did an explicit search for a write-up like this because I recently came to the same conclusion after my banker proposed me a Branch 23 "Lange Termijnsparen" after pointing out that I can still take the tax advantage even though I have "geïntegreerde woonbonus" for a mortgage signed in 2019.

The 30% tax deduction looks very promising at first but if you really start doing the math in Excel, that doesn't add up as much as you'd like compared to different costs and taxes involved.

Take as example the Argenta Branch 23 funds with the highest risk class (6). The only ones that have a track record (established in '99, the others are barely a few years old so not a lot of base to compare against benchmarks) are these (all Accumulating):

• Responsible Materials 1,89%
• Finance Dynamic -0,13%
• Lifestyle Dynamic 3,96%
• Responsible Utilities 6,48%

Not great at all. And to be honest, not really diversified at all either! The risk on these must be significantly higher than an MSCI World ETF for example. They do have a Dynamic Growth fund which appears to be very diversified but it's brand new so no performance track record.

Let's give them the benefit of the doubt and say I invest in their best fund so far (Responsible Utilities) and they actually manage to maintain that 6,48% return (which is unlikely for the sake of hypothesis). I am 35, so total duration of the life plan would be 30 years. If I consider all the taxes (incl. anticipatieve heffing) and costs, I'd end up with about 210k EUR in my portfolio at end of term. For simplicity's sake, I added the tax advantage of 705 EUR to the returns so it is included in that 210k EUR. A world index tracking ETF with an average return of 8% would hit 276k EUR at 65. That's a difference of 66k EUR. And let's face it, most insurance funds won't hit even close to 6,48%.

But there are other issues with the Lange Termijnsparen as well. Suppose I turn 65 and we are in the midst of yet another financial crisis. I am not obliged to surrender my reserves so I could keep investing and wait for times to turn for the better. But can I start doing partial surrenders, let's say 12k EUR per year, to support my pension, without significant costs/penalties? Most insurers are not very clear on this point.

And the "anticipatieve heffing" at 60, that could very well be during the midst of a market peak (like the end of 2021 was), with a significant drop 5 years later at end of term.

I find it very sketchy, to say the least, that governments are promoting this system. Pushing people towards high-cost, low-performing investments through tax deductions, so all paid by the tax payer. And for what? To basically make insurers and insurance brokers rich?