The reform of pension plans is news. The novelties planned by the government on these investment and savings products aim to promote youth employment and stimulate their investment, but what can the self-employed expect from this reform? Please pay attention, we’ll tell you.
What is the Reform of the Pension Plans?
What is proposed by the Ministries of Economy and Finance is the rescue of money deposited in pension plans more than a decade old from 2025. This new assumption for the rescue of funds before retirement joins the already in force in the case of serious illness, long-term unemployment, or threat of eviction from the housing.
What are the Particularities and Conditions of the Measure?
The self-employed and taxpayers, in general, will be able to recover the funds deposited in the plan seven years from now, together with the income generated, provided it is more than ten years old and without any amount limit. It means that you cannot recover the money deposited before 2015. There are three options for the recovery of your pension plan:
- Rescue of the entire capital, 100%, with a single movement
- Rescue periodically as income
- Mixed rescue that combines two previous forms. In this case, the saver receives the first part of the capital and then a periodic income.
- Tax treatment of the rescue of the pension plan
The taxation of the rescue of a pension plan is different from that of the contributions. While in the latter case, the investment reduces the taxable income of the IRPF with a limit of $8,000 or 30% of net income by reducing tax payments and favoring savings, if we talk about rescue, the consequences are in reverse.
Why is it Convenient for Us to Withdraw From the Pension Fund in One Sitting after 2025?
It should be noted that today, the capital recovered from a pension plan is work performance and, as such, increases the tax base of the IPRF by increasing the cost of the fiscal invoice. More taxes must be due to understanding each other to more income derived from the capital rescued returns.
2015: The Year of the Massive Withdrawal of Pension Plans?
This new assumption for rescuing pension plans with more than ten years suggests that from 2015, there will be an important outflow of money from the entities. However, this depends mainly on the economic situation and the evolution of the pension system in question.
According to data from the Ministry of Economy, as of December 31, it had accumulated $68,000 million in pension plans. Will that figure be withdrawn in 2025?
Pension Plans for the Self-Employed
The pension funds are savings and investment products intended to supplement the retirement pension of the self-employed who have one. However, it should be clear that there are no specific pension funds for self-employed workers, and their fiscal profitability is the same for all savers.
It is crucial to bear in mind that the average pension of the autonomous pensioner is only $710, a figure considerably lower than that of the salaried pensioner, which, according to the data extracted by the National Institute of Statistics (INE), reaches $1,209.07.
You can see the utility of the pension plans for the self-employed from all this. You must consider that the lower the public pension coverage concerning the salary, the more significant the private saving must be to maintain the standard of living.
It is also essential to consider that 80% of the self-employed choose to contribute to the minimum base, thus reducing their benefits, including the retirement pension.
All in All
A pension scheme is a kind of savings plan that helps you save your money later in life. The system includes favorable tax treatment compared to other forms of savings. Reforms of pension plans affect self-employed people as no central power helps them make money for their retirement. When the government makes pension changes, the SME employees ask for their retirement plan’s rights.
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