Retirement is a desire of most people. Who doesn’t expect, after a long period of work, to be able to live peacefully and enjoy life? However, do you know the types of retirement there are?
In recent years, we have seen the subject of retirement become one of the most talked about. The main reasons are:
- the discovery of Brazilians of the need to think about other types of retirement, to complement the public one.
- the new public pension laws that changed the landscape for workers.
Therefore, knowing these types of retirement is important to understand how the current situation is and to start planning to retire with quality.
Contents [ hide ]
- 1What types of retirement are there?
- 2What types of public pensions exist?
- 1How does the General Social Security System work?
- 2Retirement by contribution time
- 3Retirement by age
- 4Disability Retirement
- 5Special Retirement
- 6How do the Social Security Systems work?
- 7How does the Complementary Pension System work?
- 3What types of private pensions exist?
- 1How does PGBL work?
- 2How does VGBL work?
- 3How does private corporate pension work?
What types of retirement are there?
When we talk about these types of pensions, we can say that the first division is between public and private pensions.
Public retirement is a right guaranteed to every Brazilian citizen. Monthly, workers who are under the CLT regime are discounted with a percentage of their salary that goes directly to the National Social Security Institute (INSS).
Thus, over time, it is as if a savings account was created , known as social security.
On the other hand, private pension is made up of different plans for accumulating assets to be redeemed in the future. These plans are managed by financial institutions and banks and have their own characteristics.
However, to be more specific, it is necessary to address the particularities that exist between the variations within these two major types of retirement. So let’s talk about each one.
What types of public pensions are there?
Public retirement in Brazil has 3 categories:
- General Social Security Regime (RGPS);
- Own Social Security Systems (RPPS);
- Complementary Pension Scheme (RPC)
How does the General Social Security System work?
The General Social Security System is the system that covers all people who contribute to the INSS. As it covers a large part of Brazilian workers, it is the main type of public pension.
Within this system, it is foreseen that taxpayers are entitled to retirement if they fall into one of the 4 categories:
- contribution time;
Retirement by time of contribution
One of the most common types of retirement entitles you to the benefit after a contribution period. In practice, currently, this period consists of 35 years for men and 30 years for women.
However, it is important to remember that there are some categories that have different contribution time, such as teachers and military personnel.
Retirement by age
Men aged 65 and over and women aged 60 and over are entitled to retirement age . However, there is a difference for rural workers, in these cases, the rule becomes 60 years or more for men and 55 years or more for women.
In addition, it is important to emphasize that, to be entitled to old-age pension, the taxpayer must have at least 180 months (15 years) of contribution to the INSS.
By disability retirement
Disability retirement is the type of retirement that benefits the taxpayer considered incapable due to illness or accident. To obtain this right, it is necessary to present a medical expert report carried out by the INSS.
Special retirement is a retirement that benefits taxpayers who have professional activities considered harmful agents for health. Some examples are: biological, physical or chemical.
How do the Own Social Security Systems work?
This is the type of retirement exclusively aimed at public servants who are in public examinations who occupy effective positions.
This type of pension is named for the possibility that each of the federal public entities, such as the Union, States, and Municipalities, is able to create its own regime.
In general, the pension offered by this scheme is based on only two factors:
- contribution to the INSS;
- length of service required to be able to retire.
How does the Complementary Pension System work?
As the name says, this is a type of retirement that acts in a complementary way. Thus, its objective is to offer an additional pension to that presented both by the General Social Security System – RGPS, and by the Special Social Security System – RPPS.
In an RPC plan, the taxpayer gets retirement due to the accumulation of a reserve over the years. Therefore, it is very common to define this plan as a type of capitalization over the years.
The big issue is that participation in this pension is optional. Thus, the worker is not required to be paid monthly.
What types of private pensions are there?
As many already know, private pension is a way for a taxpayer to invest money for retirement on their own.
These investments have nothing to do with public retirement. Therefore, they often serve as a way to supplement this income and ensure a smoother retirement.
Among all the investments available, when we talk about types of private pension retirement, we can highlight 3:
- PGBL: Free Benefit Generating Plan;
- VGBL: Free Benefit Generating Life;
- Private corporate pension.
How does PGBL work?
Speaking about private pension, the big difference between the two main types of retirement is related to the form of taxation of each plan.
The Free Benefit Generator Plan is indicated for the taxpayer who chooses to declare the annual income tax using the complete form. After all, with PBBL it is possible to obtain discounts at that time, that is, to include in your income also levied on the tax amount.
How does VGBL work?
On the other hand, this is the type of private pension indicated for those who make the declaration using the simplified model.
The advantage is that the VGBL plans only pay taxes on profitability and not on the whole. Therefore, it is taxed only on redemption.
How does private corporate pension work?
These types of retirement are formed by investment funds restricted to employees of a particular company.
Generally, this plan has the contribution of the organization. An example are companies that, for every BRL 1 invested by the worker, apply another BRL 1.