Do you know how a private pension works? How important is it? What types are available? To answer these and other questions about the topic, we’ve prepared this post for you.
Private pension is a medium to long-term investment fund that aims to ensure the reserve of values, whether for future purposes or to complement official retirement, which is often insufficient to meet needs and ensure quality of life of the retiree.
In this type of investment, the contractor pays a certain amount to the insurer and, after a given period, he can redeem both the amounts invested and his income, respecting, of course, the contract signed .
The amounts and frequency of payments are determined by the contractor’s profile. That is, by the amount that is intended to accumulate and by the investor’s financial availability. Discharges are usually made monthly. However, there are quarterly, semi-annual, annual and even one-off plans. Furthermore, redemption, taxation and investment rates are variable.
It is the most suitable plan for people who do not have high earnings, who declare their Income Tax (IR) directly at source or who wish to invest more than 12% of their annual gross income. In this modality, the amount invested is not deducted from the IR, however, when the contracting party makes the redemption, taxes are levied only on income.
It is the most suitable form of private pension for those with high income, since the amounts invested may be deducted from income tax if they do not exceed 12% of the contractor’s annual gross earnings. Thus, taxes will only be paid when the invested amount is withdrawn.
Private pension plans offer numerous benefits. Among them, we can highlight:
As you can see, having a private pension means planning financially for the future. It is worth remembering that, to ensure the success of the investment, it is essential to pay attention to the specifics of the plans and, of course, opt for a reliable insurance company recognized by the market.