What do I do with my pension plan

What do I do with my pension plan

What do I do with my pension plan?This is a question that should arise anyone who had hired a pension plan, after checking as stock markets have comprotado. Many consumers are unaware that they are losing money on their current pension plan and also know to which category it, and if it is adapted to their risk profile. It occurs all too often that customers very risk averse or very close to retirement, have hired a pension plan in the category of equity, the riskiest of all. They have come to have significant losses, which in some cases could not be restored by having too little time for that, being near retirement. In addition, the cost of these plans, equity, when they come off the bench, are the highest allowed by law. If the maximum charge is 1.75% per year on the accumulated savings (1.50% the Management Company and the Custodian 0.25%), most banks are charging a total of between 1.50% and 1.75%.

It is also common ignorance among consumers regarding pension plans can leak. Unfortunately, it often happens that in the outlets where these products are marketed savings in the long term, by omission or lack of training, not adequately explain its characteristics, not taking into account the investment profile of the client, or their age, among other parameters to consider, to know that needs to have and how to guide and advise you on what is best for you to hire. Just some benefits are listed, as in the contributions deducted for rent and for hire him / pierce you can take a TV of 42 inches. You have to know that these “gifts”, is due to tax to finance as investment income (RCM) by the amount of the value of the object. For example, if the TV is worth 1,000 € you will have to go through tolls and pay the Treasury € 210 in income tax.

There are several categories of pension plans from less to more risk: Guaranteed, Fixed Income Short-Term Long-Term Fixed Income, Fixed Income Mixed, Mixed Equity and Equity.

What category is your plan?

Does it fit your risk profile?

No category is saved from having losses, including guaranteed pension plans, as some plans in this category have reached even to losses of 22%, according to sources Inverco (Association of Collective Investment Institutions and Pension Funds) . The security offered by these plans is to end, which may be in 20 or 25 years, and if you do not stay until the end you do not get what was promised. Even coming to the end, in the case that would have given greater return on guaranteed only give you the promised guarantee and over it will be them.

Pension plans, you can transfer part or in full, completely free of charge and as often as desired without having to go through the Treasury. The transfer options available are: a pension plan to another plan or a pension plan to an insured pension plan (PPP) or vice versa.

Our recommendation if you currently have a pension plan is as follows:

If you have> 55 years and are very conservative and have a lot of risk aversion, regardless of how old you are, what you need is to pass your current pension plan Assured Future Plan, whose initials are PPA. The PPA, is insurance that provides the same tax benefits as the pension plans but with the difference that the PPA is guaranteed from day one and is not subject to the risks of the stock markets. The PPA’s in 2013 grew 14.13% in managed volume, reaching 12,786 million. of €. When you’re close to retirement, you must protect the most of your savings, so much effort and work, you have been hard-won and you should not expose yourself to possible losses, which then can not recover.

If you have <55 years and have no risk aversion, we recommend a pension plan. When markets are scrambled, it is preferable shelter in fixed income category, and when the storm has passed, or think that the markets have bottomed out, and can not fall much further, it will be good time to return to more aggressive categories because we are buying cheap, and like everything coming down, ends up, sooner or later we will benefit from the expected rise.

We recommend that you analyze in detail the statistical reports of your plan periodically sends your body.