In the article "Thinking about retirement do not leave for tomorrow!" Explained the importance of creating a supplement to retirement pension from Social Security. Put like that, it's fine, but what are the alternatives? There are several ways to set up a retirement savings, choose the one that best suits your profile and needs will depend on your age, risk you want to take and if you also want tax relief.
I'll explain three of the most used to supplement the pension products are: Pension Funds, Pension Plans and Pension Insurance Insured. Only the names and we can be confusing, look the same, but they are not, see their differences.
Pension Fund, also called Pension Plan. This is a saving system designed by management whose main characteristic is enjoying an excellent tax treatment as contributions to the Fund reduce the income tax base, such annual contributions to the lesser of the following amounts to be limited:
You can not choose the duration of the plan, but you can dispose of it in cases of: Retirement on Social Security, total, absolute or severe disability permanent disability, death from any cause, severe dependence or high dependency, serious illness or prolonged unemployment. Another feature is that it does not guarantee a return, being able to get at one point negative returns. These funds are classified into 5 groups depending on the risk you want to take, you may opt for fixed income, mixed fixed income, mixed equity, equity and guarantee, the latter mark a warranty period which is usually more than 7 years, met that period, you are guaranteed only the money put. Another feature is the flexibility of the product, the investor decides how, when and where every year brings even the law allows you to move all or part of vested rights to another Manager or a PPA.
I have discussed this product taxation, as to the future taxation you should know that when bound duties are levied Plan, taxed 100% as work performance, in all cases I mentioned above. When we retire, the less costly option would be to collect the money as income and thus diluted in time to pay taxes, only contributions made prior to January 1, 2007 will be reduced by 40% when perceived as capital.
Insured Pension Plan (PPP). It is a safe form of savings for capital that the insured will receive upon retirement. Unlike the Pension Fund has a guaranteed technical interest is reflected in policy at the time of recruitment. Taxation in the assumptions can perceive the capital and the possibility of transfer to another or PPA Manager is the same as in the Pension Fund. We can say that this product is a clone of the Pension Fund with the only difference that the PPA is an insurance policy and has a guaranteed technical interest.
Savings Insurance. This product is very different from the previous ones, although it is a savings insurance as the PPA. It is insurance (annual or fractionated) periodic premium, you can choose the length of the product, allowing you to save in a planned and regular basis for any purpose (retirement or otherwise), there is no annual limit bonuses and you can make contributions extraordinary, has a guaranteed maturity according to a technical interest more profit participation capital. Has liquidity from a period that is normally two years, so you can access the money saved before the expiration of insurance and opt for the rescue with a small penalty (and your savings would perceive the policy void). Another possibility is the reduction, which is the cessation of regular contributions, keeping the technical interest more profit sharing. You can also request an advance of money saved. As you see the Safe Savings has liquidity if necessary and you can choose when you want to have your savings.
As for taxation, periodic contributions are not deducted in income tax due and taxed as income from movable capital (currently 18% of goodwill), unless you decide to turn it into an income, in which case the capital gain is exempt from taxation and revenues which are collected from the time have very favorable tax exemptions depending on the age of the policyholder. In case of death, it is also more favorable, because it is taxed on the inheritance and gift tax.
Here's a summary of their differences, I've made some uncoloured features to let you decide which is best for you. And remember, your insurance broker will advise you on which is the best product that suits your needs.
I'll explain three of the most used to supplement the pension products are: Pension Funds, Pension Plans and Pension Insurance Insured. Only the names and we can be confusing, look the same, but they are not, see their differences.
Pension Fund, also called Pension Plan. This is a saving system designed by management whose main characteristic is enjoying an excellent tax treatment as contributions to the Fund reduce the income tax base, such annual contributions to the lesser of the following amounts to be limited:
- For those under 50 years, $ 10,000 or 30% of net income from employment and economic activities.
- From 50 years of age, 12,500 or 50% yields.
You can not choose the duration of the plan, but you can dispose of it in cases of: Retirement on Social Security, total, absolute or severe disability permanent disability, death from any cause, severe dependence or high dependency, serious illness or prolonged unemployment. Another feature is that it does not guarantee a return, being able to get at one point negative returns. These funds are classified into 5 groups depending on the risk you want to take, you may opt for fixed income, mixed fixed income, mixed equity, equity and guarantee, the latter mark a warranty period which is usually more than 7 years, met that period, you are guaranteed only the money put. Another feature is the flexibility of the product, the investor decides how, when and where every year brings even the law allows you to move all or part of vested rights to another Manager or a PPA.
I have discussed this product taxation, as to the future taxation you should know that when bound duties are levied Plan, taxed 100% as work performance, in all cases I mentioned above. When we retire, the less costly option would be to collect the money as income and thus diluted in time to pay taxes, only contributions made prior to January 1, 2007 will be reduced by 40% when perceived as capital.
Insured Pension Plan (PPP). It is a safe form of savings for capital that the insured will receive upon retirement. Unlike the Pension Fund has a guaranteed technical interest is reflected in policy at the time of recruitment. Taxation in the assumptions can perceive the capital and the possibility of transfer to another or PPA Manager is the same as in the Pension Fund. We can say that this product is a clone of the Pension Fund with the only difference that the PPA is an insurance policy and has a guaranteed technical interest.
Savings Insurance. This product is very different from the previous ones, although it is a savings insurance as the PPA. It is insurance (annual or fractionated) periodic premium, you can choose the length of the product, allowing you to save in a planned and regular basis for any purpose (retirement or otherwise), there is no annual limit bonuses and you can make contributions extraordinary, has a guaranteed maturity according to a technical interest more profit participation capital. Has liquidity from a period that is normally two years, so you can access the money saved before the expiration of insurance and opt for the rescue with a small penalty (and your savings would perceive the policy void). Another possibility is the reduction, which is the cessation of regular contributions, keeping the technical interest more profit sharing. You can also request an advance of money saved. As you see the Safe Savings has liquidity if necessary and you can choose when you want to have your savings.
As for taxation, periodic contributions are not deducted in income tax due and taxed as income from movable capital (currently 18% of goodwill), unless you decide to turn it into an income, in which case the capital gain is exempt from taxation and revenues which are collected from the time have very favorable tax exemptions depending on the age of the policyholder. In case of death, it is also more favorable, because it is taxed on the inheritance and gift tax.
Here's a summary of their differences, I've made some uncoloured features to let you decide which is best for you. And remember, your insurance broker will advise you on which is the best product that suits your needs.
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