Tue. Oct 27th, 2020

Financial Planner

Tips, tricks and guidline for financial planner

Saving for Retirement Not for Treasury

Saving for Retirement

Now of retirement to collect the savings in their pension plan many almost give them a heart attack since it is when they realize the fiscal implications of having to choose a savings product in the face of retirement. Paying taxes on products to save for our retirement can account for more than half of the capital we have saved.

Saving for Retirement

The current economic situation the demographic evolution and the social security situation is causing many to consider allocating part of their savings to supplement the public pension in the future since each view will be more complicated to get to collect the Maximum of the pension.

Products to save for retirement

Thus, there are several products to channel savings towards retirement some are illiquid such as pension plans ie, except for very specific circumstances cannot be recovered until the date we retire and others are liquid in case we need it or want to recover the capital saved before the retirement date we can do it without justifying any reason. You can see more information in saving for retirement: not just pension plans.

Some have tax advantages when contributing in pension plans the amounts contributed reduce labor income which means saving between 20 and 52-56% of contributions but then at the time of collection you have to pay for contributions and earnings as work income from 20 to 56% of the final savings balance.

Others, such as investment funds retirement plans or PIAS individual savings plan systematically have tax advantages only when they are charged, in retirement, since they pay taxes only for profits, capital gains, and a type that fluctuates between 1 and 21%, well below pension plans.

Recovered capital saved as annuity

As pension plan: The incomes that we will receive will be taxed as labor income. To calculate the taxes payable, we have to add to the annual rent that we will charge for the pension plan the amount that we will be receiving from other incomes, including the public pension.