Also known as supplementary pension, private pension is a form of financial investment. Its central objective is to guarantee a monthly income after a predetermined period.
Do you know when you are thinking about quitting work? Just like the retirement period.
According to the suggestion of its own name, it is a complement to the benefit that is paid by Social Security, which is retirement as we know it.
However, we need to emphasize that the retirement process has changed in relation to age and contribution time, both for men and women, so it is important to check the new rules.
Private pension cannot be considered as exclusive. Only for those working in the labor market, it is called that way.
This is because it is a long-term investment, where most people use its benefits after the end of their working lives.
We can perform a division into two phases, to make the understanding simpler:
- Accumulation phase: This is the moment when you make a monthly deposit of a pre-determined amount over a period, which is normally between 20 to 35 years;
- Income phase: This is the moment when you receive all the invested amount, where the amount that will be received will be much higher than the amount invested.
See the example, you make a deposit of R $ 500 monthly, during the period of 30 years, the total deposited at the end of the period is R $ 180 thousand.
However, the amount that will be redeemed will be the same as the amount deposited and plus all income for the period in question.
The profitability of the money will happen thanks to the investments that must be made in fixed income and also in conversational actions.
What is the amount, when and who should invest in Private Pension?
There is no restriction on who is eligible to invest in private pension. Anyone who is interested in improving their income while they are retired can invest.
But this type of investment is more suitable for those who have an income higher than the contribution ceiling of the INSS retirement benefit, for those who are not INSS contributors or even for those who cannot make their own savings.
In defining the private pension plan, some questions need to be taken into account:
- When do you plan to start the application?
- When do you plan to retire?
- What extra amount do you have in mind to receive on retirement?
From these points duly answered, it is possible to the value of the monthly contribution, that is, the amount you need to pay to get the extra income.
Now the time has come to choose which plan is best suited to your profile.
Understand the difference between PGBL and VGBL
In Brazil, the products that are available are:
- PGBL – Free Benefit Generating Plan: It is the ideal plan for making the complete declaration in the Income Tax – Income Tax, as it has a deduction of 12% of the taxable base.
- VGBL – Life Free Benefit Generator: This is the right plan for those who make the simplified declaration of IR – Income Tax, also for professionals and also for those who already make the 12% contribution, as it cannot be deducted your investment.
What fees are charged by Private Pension?
Regardless of the private pension plan, rates are always present and as villains, it is important to pay attention to them, mainly because both insurers and banks, in general, do not clarify all rates clearly. Check the list of fees:
- Loading rate: It has an impact on the contributions that are made, which can vary from 0% to 3%. If you make an investment of R $ 1,000 with a loading fee of 2%, the applied discount will be R $ 20, where the total that will be applied is R $ 980.
- Administration fee: It has an impact on the overall profitability of the application, which can vary from 1.5% to 3%. This is the rate that has the greatest impact on the application. When choosing, choose the application that has the lowest administration fee.
- Exit fee: In case of early redemption, this is the fee charged. However, most insurers carry out this collection only in the first years, some, however, have a grace period for redemption and / or external transfers.
When choosing your application, take into account all the rates we present, so that you can have a clearer idea of everything that will be discounted from your application, so that you have no surprises in your pension plan.
What are the types of income in private pension
There are still some questions to be defined, regardless of the product chosen. Find out what types of income are available:
- Temporary Income: This is where you have a monthly income for a predetermined period. However, if you die, the benefit will be terminated, even if there is still a balance.
- Lifetime income: This type of income allows you to receive a monthly pension while you are alive. However, if you die, the benefit will be terminated, even if there is still a balance.
- Reversible lifetime income to the beneficiary: In this type of income, you receive a monthly pension until the moment you die, and the moment you die, a percentage of the money is returned to the beneficiary, which must be indicated at the time of signing the contract.
What are the additional guarantees of the Private Pension Plan?
There are some additional guarantees in the Private Pension plan, where you can choose to pay an additional fee. Discover the main possibilities that are offered in the Brazilian market:
- Death benefit: In case of death before the income is earned, the beneficiary indicated in the contract signature, receives the entire amount in full.
- Fixed-term pension: Much like the previous case, but with the difference that the receipt after death is in installments, as if it were a pension.
- Child support: In this case, if there are minors, if there is a death, the child (ren) receive a monthly pension until they reach the age of majority.
- Spouse’s pension: Much like the children’s pension, but only the spouse is the beneficiary.
- Disability income: In cases of accidents that can result in disability, it will be possible to receive a monthly income, as if it were insurance in cases of disability.
What care should be taken when hiring private pension
When you are hiring private pension, you need to be careful not to fall into some pitfalls, check out some precautions below:
- Observe carefully the taxation regimes: When contracting the private pension plan, there are two possible regimes: Progressive and Regressive. However, it is necessary to be very attentive, as any investment can be committed to the wrong choice. The determining factor for choosing the tax regime is the time that it will be applied.
- Define the way to redeem your investment: After the deadline has been met and the redemption time has arrived, there are two alternatives: Withdraw all the accumulated amount at once or there is the possibility of lifetime income, where you receive a certain amount on a monthly basis .
- Know the possibilities for an investment: There are several investment funds, where you need to identify what is the best possibility for what you have in mind.
Now that you know everything about private pension, see other forms of investment. Here on our portal you will find articles and videos on the most diverse ways to invest your money