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Financing statutory pensions will soon become problematic. According to forecasts by the Inspection Générale de la Sécurité Sociale (IGSS), outgoing pension benefit payments will exceed incoming contributions from 2035 and the payment reserve will be depleted by 2043. It is therefore increasingly important to build up your own retirement capital.

How can you maintain your income in retirement? What other solutions are available in addition to a traditional pension fund?

The pension savings plan offered by Banque de Luxembourg, Prévoyance 3, is a simple pension solution and enables you to benefit from a reduction in your taxable base from today.

Through the Prévoyance 3 pension savings plan, you can lessen your tax bill at the same time as preparing for your own and your family’s future. You can deduct up to 3,200 euros per annum from your taxable base. By increasing the amount you pay into your retirement savings plan to this new maximum amount, you could benefit from a bigger tax deduction.

Three options when your plan matures

The plan matures after you reach the age of 60, provided it has been running for 10 years. At maturity – depending on your choice – you get back your capital and a profit in the form of:

  • Capital
  • An annuity
  • A combination of these two options.

Tax position when the plan matures

  • The part paid as capital will be taxed at half your overall tax rate
  • 50% of the part paid in the form of an annuity will be exempt and the remainder will be subject to tax at your overall tax rate.

Are you self-employed? An independent professional? Interested in taking advantage of tax breaks for building an additional pension?

Since 2019, the supplementary pension system has been available to freelancers and independent professionals.

Planning for your retirement has become increasingly important. At Banque de Luxembourg, we encourage you to take action today to maintain your lifestyle and transition to retirement with peace of mind. To find out more and to assess the impacts on your personal situation, please contact your usual adviser or our specialists.

Gery Thomas
Private Banking Adviser
Dirk Leistico
Senior Personal Banker
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