30 November 2020
When is the best time to start a personal pension plan?
The chances that your State Pension will be enough to live on later on in life are slim. Especially if you want to maintain your current standard of living. That is why it’s good to have pension savings as a nest egg.
With a personal pension plan you can top up your State Pension amount with additional savings. The government encourages this kind of saving by offering tax relief on your pension plan, under certain conditions.
There are only three requirements for starting your plan:
- You have to be at least 18 years old and no older than 64.
- You must have a taxable income.
- You must be living in Belgium, or in another European Economic Area member state, when you sign the contract.
The earlier you start your retirement savings, the higher your potential return will be. And by starting early, you will have the added advantage of getting potential return on top of the interest and income you have already received.
The best time to start saving for your retirement is today!
Not yet started a personal pension plan, yet? You probably had a good reason: most of your income was directed to doing things like paying off your mortgage, providing for your growing family, or buying a new car, etc. But even if you’re already a bit ‘older’ it shouldn’t prevent you from starting now. After all, the best ‘time’ to begin is always today. And even though it is best to start as early as possible, you can always start when you’re 55 and still benefit from the tax advantages.
What is the best thing to do and when?
- Younger than 50? Contact ING as soon as you conveniently can. Have a look at which fiscal pension savings plan options suit you best.
- Between 50 and 55? You can still build up a good amount of capital and enjoy years of tax relief. Start a pension savings contract before your 55th birthday and pay pension tax when you turn 60. You will also benefit from tax relief in the final years of the contract (between the ages 60 and 64), which are completely tax free.
- Between 55 and 65 years old? At this point, the focus shifts from return on investment and towards pension tax advantages. If you start a pension savings plan after 55, the contract must extend for at least 10 years.
- Saving for your pension after 65? Saving and/or investing for your pension is always an option, but starting after 65 means foregoing the benefit of tax relief.