Retirement: starting your second life
One day, you’re going to finish working. The end of your professional career will mean more freedom, more doing what you feel like and a less demanding schedule. Lots of us have big plans for when we retire, while others don’t think about it so much.
But whether you have plans or not, you’ll still want to keep up your present standard of living.
Even those who don’t give much thought to retirement want a good life when they’re older: nice holidays, days out with the grandkids, taking that course you finally have time for. All these things are possible if you’re properly prepared – financially too.
Four ways to be well prepared financially
Financially speaking, there are four ways to be well prepared for your second life:
Check your state pension
According to the Federal Pensions Service, the average state pension in Belgium is just 1,100 euros. Have you ever thought about how much state pension you’ll receive?
Be sure to check the calculation of your state pension at MyPension (website available in Dutch, French and German).
And then simulate your overall financial situation after retirement using the Pension Simulator on the KBC website.
Time to take a clear look at the future!
Saving for retirement: could you be doing more?
Putting aside a little extra will obviously come in handy when you retire. Fortunately there are several ways you can achieve this. There’s something for everyone, depending on your wishes and possibilities.
You can build up a nest-egg for your retirement through pension-saving and long-term saving.
These approaches offer you:
- an extra capital sum on retirement or later
- tax benefit on your contributions
- possibility of combining the tax benefits of both systems.
Or you can take out a KBC Investment Plan, either independently or alongside pension-saving and long-term saving. You pay into your KBC Investment Plan at regular intervals, spread over time, and also in small amounts if you prefer.
Make sure you take out affordable hospitalisation cover before you retire.
- Pension saving: tax relief and a possible supplementary pension.
- Long-term saving: tax-advantaged saving for your house and your retirement.
- KBC Investment Plan: let your money work for you.
- The financial consequences of hospitalisation: leave nothing to chance!
1. Pension-saving:tax relief and a possible supplementary pension.
It’s best to start early with pension-saving, but you can still take advantage of it later. You can pay in until the year you turn 64, provided youhave an income and pay taxes.
Every year, you receive 30% or 25% tax relief depending on whether you opted for 990 euros or 1,270 euros.
It’s still possible to begin pension-saving in your 50s, but it’s best to start before your 55th birthday. In that case, you pay a final amount of tax at the age of 60 and your contributions from the age of 60 onwards will be tax-free. KBC deducts the final tax from your pension-saving account so you don’t have to worry about it.
With a pension-saving fund, you can wait for a favourable moment on the financial markets to sell, or do so over time, as and when you need. We advise you not to draw on your pension-savings before the age of 60, because you will then have to pay considerably more tax, typically 33%.
Are you already saving towards your pension somewhere else? If so, contact us to see whether it would be worth your while transferring to KBC.
2. Long-term saving: tax-advantaged saving for your house and your retirement.
What about building up an additional pension under the ‘long-term saving’ tax system? This offers you tax relief of up to 30% on the amounts you pay in (depending on your income and your personal situation).
What's more, you can combine this relief with the tax reduction offered by pension-saving, and in some cases even with the ‘housing bonus’ for your mortgage loan. If, for instance, you have not reached the maximum tax-deductible amount with the repayments on your mortgage loan, you can supplement this with long-term saving, giving you an even bigger tax benefit.
Have you already paid off your mortgage loan? This might be an ideal moment to start long-term saving, seeing that you now have a little to spare in your budget.
The maximum amount you can deduct each year depends on the level of your professional income or your pension. The maximum deductible amount per year for 2020 is 2,390 euros.
If you’re still liable for tax during retirement, it’s advisable to start long-term saving before the year in which you turn 65. That way, you will continue to enjoy attractive tax relief for many more years, even after retirement.
Do you already have a long-term saving plan somewhere else? If so, contact us to see whether it would be worth your while transferring to KBC.
3. KBC Investment Plan: let your money work for you.
An KBC Investment Plan lets you automatically invest amounts spread over time and at fixed intervals. Get started from as little as 25 euros, but also larger amounts are possible.
Spreading your investment over time significantly reduces the risk of poor timing. In addition, this allows you to put your emotions, which lead to buying when prices are up and selling when prices are down, to one side.
4. The financial consequences of hospitalisation: leave nothing to chance!
Are you well prepared for the financial consequences of being admitted to hospital? Perhaps you are currently still covered by your employer's hospitalisation policy. However, in the event of retirement or dismissal, this insurance will be cancelled and it's advisable to take out cover for yourself. The older you are, the higher the premiums.
So don't wait to check out what KBC has to offer