Thinking about the financial future and the moment of retirement is cause for concern. The progressive aging of the population , increase in life expectancy and fewer and fewer contributors poses a dilemma. Keep working until almost old age? Will pensions reach after a long life contributing? Pension plans are a long-term savings product that can help you in the future. We invite you to learn more about them in this article.
Pension plans, what are they?
A pension plan is understood to be a savings banking product. In which a monthly, fixed or variable amount is paid, and that will be used at the time of retirement. When executing our right of enjoyment on a pension plan, we will receive the money in the form of capital, income or mixed. Pension plans are offered by all banking entities and have tax advantages that allow deductions in our income statement.
How are the contributions?
The contributions of a pension plan are variable, being able to enter the amount that we want periodically. In the same way, specific contributions can be made. To get an idea, they are like a piggy bank that we are filling for the future. The current limit in Nigeria for annual contributions is 8,000 euros . Except for people with some type of disability equal to or greater than 65 percent, in which the limit is 24,250 euros per year.
Contributions to a pension plan can be suspended and resumed at any time . If we go through a bad economic time, it will be enough to notify the entity or carry out this suspension from our online banking. The possibility of contributing again is present and automatic.
Are pension plans profitable?
Pension plans have a variable return depending on the choice of plan. There are those that can offer good dividends in the form of interest, but that act with a high risk. Losses can also be significant. There are much more conservative plans in which the profitability is lower, but it is assured . If you have doubts when it comes to hiring a pension plan and its profitability, it is best to seek advice from your bank manager. Pension plans can be transferred to each other to always go to those with a better trend. Remember that you can have as many pension plans as you want, and your economy allows you.
Can they be rescued only once you retire?
This was the case until the regulation changed, thanks to which pension plans can be rescued before their time. The assumptions are long-term unemployment, foreclosure, serious illness, dependency or death of the owner. In this case, your beneficiaries are the ones who will receive it. Likewise, as of January 1, 2025, pension plans with more than 10 years old from that date will be able to be rescued without any problem.
Pension plans are a cushion for the moment when we stop working; and its early redemption allows you to enjoy the invested capital and its benefits in case of need.