A pension plan is, in short, a savings program adopted by a company or a person mainly to capitalize the retirement pension, although they can also cover other contingencies such as disability, death and dependency.
Its main purpose, once we carry out the rescue of the pension plan, will materialize in complementing the retirement pension that we can receive on its day from Social Security or, where appropriate, from a mutual fund to which we belong as self-employed. if we have not opted for the Social Security scheme.
It is important to know the taxation of the rescue of a pension plan since, as we say, its ability to deduct taxes is one of its virtues and one of the strengths that make this product attractive. The contributions we make to our pension plan directly reduce the tax base in the income statement.
Taxation of the rescue of a pension plan
Although it is not true that pension plans do not generate the obligation to pay taxes , as we may have sometimes heard, their taxation is deferred or delayed until the moment the pension plan is rescued. This crucial moment usually occurs when retirement arrives, although, under certain circumstances known as particularly vulnerable, such as unemployment, illness or eviction, this moment is allowed to advance. There is also the new possibility of requesting the reimbursement of those shares that are at least 10 years old.
If the time has come to rescue our pension plan, we must consider that the amounts that we will obtain will be considered by the Treasury as income from work and that they will increase the tax base of the income tax. The direct consequence is the logical increase in taxes to enter the public coffers.
To get an idea, the current income tax brackets are as follows: from 19% up to the amount of 12,450 euros; from 24% up to the amount of 20,200; 30% up to amounts of 35,200; from 37% to 60,000, and thereafter the 45% percentage applies.
Ways to rescue your pension plan
The rescue of the pension plan can be carried out in different ways:
- In the form of capital. Obtaining the full amount in one go.
- In the form of income. Charging an amount monthly, quarterly, etc.
- Mixed. Combine the previous two, obtaining a part in capital and another in the form of income.
- Lifetime. The life annuity that the plan manager will deliver to us.
We can use a pension plan simulator to get an immediate idea of ?? how our pension plan will work in practice.
When to carry out the rescue?
Regarding the moment of carrying out the rescue of the pension plan, it is important to consider that the amounts that we are going to obtain through our pension plan will be accounted for, for tax purposes, with those that come from our retirement pension or, accordingly. In this case, with the income from our work, which will apply a higher or lower tax rate depending on the amount of one or the other.
Regarding what is the least burdensome way, from the point of view of the taxation of the rescue of the pension plan, to enjoy our savings, in general, we can conclude that the most practical at the tax level is to collect the rescue of pensions in the form of income.
Charging periodically, the returns obtained will be lower than if we obtain them all at once, so the tax rate to be applied will be much lower than that corresponding to redemption in capitalized form.