LIFE reusable paragraphs - Pension PP3-EE

The state refunds income tax on third-pillar contributions. Income tax is refunded on contributions not exceeding 15% of your gross annual income or 6,000 euros per year. This limit applies to contributions made by both yourself and your employer.

Income tax is only refunded if you have paid income tax throughout the year. If your entire income is exempt from tax and you do not pay income tax, then refunds are not possible. You must submit an income tax return to be refunded income tax. Tax returns are not available to non-residents.

Why should I save for retirement?

The current pension system means that an ordinary pensioner will receive a pension that is only 40% of their salary before the retirement. By saving into the second and third pillars, you can expect to receive 60–70% of your pre-retirement income.

Now, we are going to receive less from the state in retirement than previous generations. In addition, life expectancy is increasing, which means that retirement lasts longer and having your own savings is more essential than ever.

Through being proactive, you can influence how your savings grow over time so you can plan your pension better.

The sooner you start to save for the retirement, the less you need to save every month.

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Pension disbursements

The optimal way to take out III pillar pension is to conclude the fund pension with the recommended payout period. You will get regular monthly or quarterly pension that is income-tax free.
The funds accumulated in the third pension pillar can also be withdrawn at any time by redeeming all or the desired amount of pension fund units.
Then income tax is applied to the entire disbursement amount, the tax rate is dependent on the age and length of the investment period.