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Steps to follow when choosing and taking out a pension plan

"Pension plans are intended to encourage long-term saving, and have, therefore, been designed primarily as products that provide extra income when entering retirement. One of their benefits is their favourable tax treatment, as contributions made to a pension plan reduce the taxable base in the annual tax return."

Another positive aspect is their flexibility, allowing customers to freely plan both the amount and the frequency of the contributions they wish to make. As a result, once they enter retirement, they will enjoy an extra income that supplements their state pension.

With regard to the ideal time or age to take out a pension plan, José Manuel Morais, Seguros Bilbao's Deputy Director General of the Life Division, states: "There is no optimum age for taking out a pension plan, but a necessary prerequisite is having some saving capacity, which, in conjunction with the tax advantages of the contributions made, will help us capitalize on our savings to a greater extent."

With the aim of guiding those who are considering taking out a pension plan, Seguros Bilbao recommends following these steps when analysing this option:

1. Your investor profile

Firstly, it is vital to identify the investor profile of anyone who wants to take out a pension plan. There are several aspects to consider in this step, such as your age, your income and the level of risk you are willing to take on. For example, the older you are, the lower the level of risk you should take on.

2. Find out what's on offer

Having established your investor profile and investment strategy, now is the time to analyse and compare the products available on the market, with a view to finding the one that best suits your needs. Here, it is important to turn to professionals, such as insurance brokers, who have first-hand knowledge of the customer's needs and comprehensive, in-depth knowledge of products.

The minimum initial contribution also needs to be considered, the amount above which we can make additional contributions, the existence of fees and commission, and whether the plan can be redeemed and under what conditions.
3. Analyse the returns

After taking out the pension plan, we recommend you to review its return on a regular basis. Bear in mind that although it is a long-term investment product, this type of plan can be transferred to other entities without paying any taxes on the return obtained up to that point.

Seguros Bilbao has just launched its pension plan campaign, giving a bonus of up to 3% for transfers. By means of this initiative, the insurance company aims to encourage people to save for retirement and reward transfers to its retirement savings products.

We recommend that you read other articles on Seguros Bilbao's blog:

At what age should you take out a pension plan?
What contributions should I make to my pension plan?
What is an EPSV (Voluntary Social Benefit Institution) and how is it different from a pension plan?

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Jone Paredes

Jone Paredes