Pension saving at KBC Brussels
- Save for a comfortable retirement
- Combine the best aspects of saving and investing
- Benefit from an additional 337.50 euros in tax relief
How does pension saving combine saving and investing?
Pension saving allows you to set aside money each year so that you’ll have a pension pot to draw on later. If you do this with a pension savings fund, that means you’re actually investing in shares and bonds. You’re not guaranteed a fixed return on your investment, meaning you can make a profit or a loss. However, because the investments are well diversified and have a very long term (up until you retire), you stand to earn more money. Of course, there are also certain costs and risks involved.
If you would prefer to have more security, you should choose a pension savings insurance plan. Strictly speaking, this also an investment product where each deposit you make earns a limited but guaranteed rate of interest right up until your contract ends. This may also be supplemented annually with a profit share, but that depends on the company’s results and therefore is not guaranteed.
The effect of compounding returns
The best time to start saving for your retirement is usually right now. After all, the sooner you start, the greater the effect of compound returns. Any return generated is added to your saved amount, where it can go on to generate further returns. This leads to a snowball effect that helps boost your total pension savings pot.
As a bonus, you also get tax relief!
The government rewards pension saving with tax relief. You can save from as little as 10 euros a month, but contributing one of the maximum amounts will get you an even bigger break:
- Save 1,050 euros a year (87.50 euros a month) and you’ll get up to 315 euros back
- Choose to save 1,350 euros per year (112.50 euros per month) and you’ll get up to 337.50 euros back