About 62% of the employees and independents are saving for their pension (Source: Febelfin). They obviously have good reasons to do so! What are the 3 most important reasons to start saving for your pension as early as possible?
1. The state pension isn't enough
All working Belgians are entitled to a state pension when the time comes. This pension amounts to about 60% of your final salary. Have no illusions: your state pension won't be enough to maintain your current lifestyle. By taking out a personal pension plan, you can supplement this modest pension. So you can enjoy your retirement without having to cut back too much financially.
The longer you save for, the bigger your pension pot should be. That's why we recommend you start saving for your pension as early as possible. If saving for your pension isn't a priority for you, you need to reconsider.
|Civil servants||2,614 euros|
Source employees and independents: Jaarlijkse statistiek van de Rijksdienst voor Pensioenen (RVP) 2015
Source civil servants: Jaarlijkse statistiek van de Pensioendienst voor de Overheidssector (PDOS) 2014
2. Tax relief
The government strongly backs personal pension plans. Taxpayers who save for their pension get tax relief1 of 30%. In other words: you can claim back from the taxman as much as 30% of what you've paid into your pension.
Example: imagine you save 850 euros a year. The amount you get back is 255 euros. In other words, you only shell out 595 euros, even though you put aside 850 euros. Not bad! That's why it pays to save for your pension.
Besides tax relief, there's another great surprise in store when you save for your pension: the return. Pension savings insurance gives you a guaranteed return, unlike with a pension savings fund.
Simulation 2: imagine you start saving for your pension at the age of 25 and you pay in the sum of 940 euros each year3. So, after 40 years, you'll have invested a total of 37,600 euros. But, at a rate of, say, 1.5%, and after a one-off tax deduction on your 60th birthday, your actual pension capital rises to 44,611.55 euros. In short, saving for your pension could earn you 18,291.55 euros.
1 The tax treatment depends on each saver's personal situation and may change in the future.
2 This simulation is for illustrative purposes only and provides no guarantee whatsoever of future results.
3 In 2017 , the maximum tax-deductible amount for pension savings is 940 euros.