The pension plan campaign is here: you don't have to pay attention to adverti...

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Like everything at the end of the year, the pension plan campaign arrives . Banks and insurers will soon begin to try to attract customers with gifts (in kind or cash) so that we purchase their products. In general, you normally don't have to pay much attention to this type of campaign, but one thing is clear: on this occasion it is worth buying this type of product.

As always, you have to do it with your head. Pension plans have a series of very convenient tax advantages, but if we choose the wrong product we can lose a lot of money .


Why hire a pension plan
I have always been very skeptical of pension plans, mainly because of their disadvantages (which I will discuss below). But lately I've seen the light .

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As I explained not long ago, pension plans allow you to deduct income tax . And this refund from the Treasury is not just a delay in taxation (since when rescuing the plan you have to pay personal income ta  India Email List  x), since if we invest this refund in the end the accounts come out very positive.



On one occasion I did a simulation of the difference between investing in a pension plan (with its disadvantages but better taxation) or in an investment fund. And the accounts gave a positive result to a pension plan , always better the better the profitability obtained and the higher the marginal rates when contributing.

What are its disadvantages
However, not everything is positive. A pension plan implies that the money cannot be withdrawn from it until retirement or until ten years after the contribution. It is blocked money that will not be able to be used . That is its main disadvantage.

Banks know that this money is captive and therefore they offer expensive products that do not offer good profitability. The profitability of pension plans is quite sad. Of course, they can be transferred between plans , just like with investment funds.

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The last disadvantage is that individual pension plans currently have very low limits: you can only contribute , euros per year . Those years of , euros a year are long gone. The Government wants to launch another type of product , more linked to the company, and therefore wants to discourage classic pension plans.

Choose a good plan
With all of the above we have a clear conclusion: it is advantageous to contract a pension plan, but only if the profitability is good (which does not usually happen). So on this occasion the decision of the exact product that is chosen is very important .

Therefore, it is better not to get carried away by the campaign that we are going to see in the coming weeks and carefully choose the pension plans offered by the market . Personally, I would lean towards an indexed one with low commissions, but it is true that there are active management plans with a good track record, regardless of whether their commissions are high.