August 4, 2020

12 mistakes you should avoid when hiring a pension plan


1. Find a good plan and avoid having the bank choose it for you. Banks have a wide range of products among which there are good, bad and regular. Unfortunately, according to statistics, the largest plans that are marketed in Spain, those that have a wealth of more than 1,000 million euros, have lower returns to those of its category. Spend time searching for a good product, since your well-being in the future will depend on this decision. Don't let the bank choose the plan for you. He MyInvestor premium neobank It is the platform that offers more pension plans. Select the top 65 market plans based on profitability and potential criteria.

2. Do not be blinded by hook deals that captivate the customer. At the end of the year, many entities launch campaigns in which they save savings with attractive returns of up to 3% and 4%, but force them to maintain investment in these products for several years. In the long term, this investment can be very expensive if it is not a good product.

3. Run away from bad plans. Many of the plans that are sold in Spain yield less than the average of its category. In the case of equity plans, 25% of those sold in Spain – a quarter – yield half of the average in the last 10 years: 2.9% compared to 6.4%, according to data officers of Inverco In the same period, the products you select MyInvestor 7.7% on average are revalued annually, always according to Inverco.

4. Do not forget that small profitability differences today change your future. A 8,000 euros investment today (maximum contribution by law) With the average profitability of the 6.4% equity plans, it would become 52,028 euros, after 30 years. If the return is 7.7%, average of MyInvestor's plans, the equity would grow to 75,304 euros, that is 23,276 euros more, equivalent to 44% more, in the aforementioned 30 years. On the contrary, a plan that gave you an annual 2.9% -25% of the plans that are sold in Spain- would make your assets grow to only 18,860 euros in 30 years.

5. Do not fool yourself. Stop thinking that you will live off the public pension. The current pension system is untenable. Being optimistic and thinking that the current conditions will be maintained in the future, keep in mind that the maximum public pension is 37,231 euros, so if your salary is higher, you will need additional income to maintain your standard of living. Further, The sustainability of the current pension system is highly questioned, so it is worth having a Plan B when your work life ends.

6. Exceeds the easy premise that you cannot save. Saving is not to allocate the money you have left over to the piggy bank, but you have to assume that Saving is part of your structural expenses. At the beginning of the month, as soon as you get the payroll, you should withdraw the amount you have decided and be disciplined. Trace your goals. Even if you have difficulty reaching the end of the month, pension plans They allow you to make periodic contributions from very small amounts. 20, 50, 100 euros … It's up to you. In this way, your heritage will grow without hardly realizing it.

7. Do not believe the false myths. Against the undeserved false fame of pension plans, historical figures show that pension plans are profitable and they have very low commissions. As always, the important thing is to invest in a quality product.

8. A pension plan can be as good as the best investment fund, given that what fundamentally distinguishes one product from another is liquidity and taxation. Thus, so far this year, many plans record returns of between 20% and 30%. For example, BBVA Telecomunicaciones, Mundiplan Audaz Global, MundiPlan Audaz Europa, Santander Variable Income USA and Fondomutua Global Variable Income. Some entities like MyInvestor They are committed to open architecture and market these products, among others.

9. Commissions are limited by law. The maximum depository commission is 0.20% annual. The management commission depends on the product. If it is fixed income it is 0.85%; if it is of mixed income of 1.30% and if it is of stock exchange of 1.50%.

10. Do not fear the taxation of plans when you retire. A widespread lie is tax punishment when you rescue the plan. Pension plans They are designed to complement the public pension. Therefore, once the retirement age is reached, the sum of the income of the plan (always income from work) to the pension will generate an increase in the taxation of general income, but as a rule this increase will be lower than the savings that The participant has achieved. If it has been contributing to a marginal of 45% and saved 3,600 euros per year, the increase in tax once retired foreseeably will not reach that sum. In addition, if so, long-term financial planning will have multiplied tax savings.

11. Do not fear illiquidity. You can access your money in serious cases. The plans are designed for the long term so, a priori, you cannot touch the money until retirement comes or 10 years after you make your contribution. That is, what you invest today you can rescue in 2029. However, the law provides that some reasons justify dispose of your money whenever you want, such as serious illness and prolonged unemployment.

12. Do not resign yourself. Your money doesn't have to be frozen in a plan. As in investment funds, the money you have invested in pension plans It can be transferred from one product to another without paying taxes and without paying commissions. If you have a bad plan, look for a better one. In addition, you can combine several plans at the same time. In MyInvestor, With just a few clicks, you can choose from the best plans in the market by investing in several plans at once.

. (tagsToTranslate) Seniors (t) Retirement (t) Pensions



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