Retirement pension plan, full of benefits

If you don't want to work after retirement age, consider taking out a pension plan

Until recently, continuing to work after retirement was somewhat unusual. Only a few people decided to keep working after reaching retirement age. Their reasons ranged from topping up the pension you receive for every year worked to simply because they liked their job and were happy to continue doing it. That situation is changing and it is increasingly common to see those who have reached retirement age still working for economic reasons. For that reason, the pension plan is the solution if you do not want to work after retiring.

If we look at what happens in some European countries, such as Germany, the idea is not so much to have a full-time job as to top up your income on retirement. In other words, a part-time job, on an hourly basis, which offers a little extra money to keep up the same lifestyle that you enjoyed during your working life.

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A pension plan to manage your savings

Considering the drifting of the Social Security piggy bank, it seems that pensions collected in a few years' time will be smaller than they currently are. Unless the whole system is reformed and financing is sought that does not depend on what is paid in, or the pensions are reduced, it will be very difficult to pay them as proposed.

For that reason, many savers consider taking out a pension plan to give them the peace of mind that they will be able to do what they want when retirement age comes around. Moreover, a good incentive is that you benefit from tax savings.

The possibility of redeeming it in certain circumstances, the freedom to make contributions (at your own pace), ease of planning and flexibility add up to tranquility in the long term.

Moreover, the financial investment instruments normally help these savings grow by improving the return on them. This allows the expected income to be prolonged over time, although it is important to suitably monitor the product type chosen to ensure that it remains in keeping with your risk profile.

A pension plan to help you maintain your purchasing power

How much money will I have when I retire?

This is the question on many people's lips, especially when retirement age begins to come closer. But what is true is that the sooner you begin to analyze the question, the greater your margin for finding solutions.

Because many people see retirement as an opportunity to do all the things that they couldn't do while they were working; for example, traveling, having a good rest, enjoying leisure time, etc. But all this is impossible if your pension is barely enough to cover your basic living expenses. And neither if you have to resort to a mini-job to top up your public pension income.

Right now, any pensioner who wants to can work. However, the 50% pension payment is compatible with a job or self-employed work. But this is quite likely to change, with the payment of 100% of the public pension plus the possibility of continuing to work.

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All of this indicates that the example from Germany is the path to follow. The way to keep purchasing power, for anyone who has not planned ahead or has not been able to save, would be to work part-time once retired. This prevents you enjoying one of the basic benefits of retiring: free time to do what you want.

However, it is not ideal and it implies a major cultural change in many aspects. Also, on a social level, in which the grandparents are a basic support for many families, not only with the care of grandchildren, but also in times of crisis, as a financial support for the family, thanks to their pension.

The pension plan allows you to have a small income each month that guarantees that you will keep your purchasing power. Not only that, but as you don't withdraw all the money at the same time, the remaining amount continues to generate returns, meaning that the income could continue for years. This depends on the total amount of money you pay in and the return on the plan. Find your plan.

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