Anzelika Dobrovolska, Luminor Pension Products Manager

Anzelika Dobrovolska, Luminor Pension Products Manager

Along with the approaching end of the year, more and more people not only hurry up and purchase Christmas presents for their relatives, but also supplement their 3rd Pillar pensions, thus voluntarily saving up for their old age.

“Already for many years we may observe that the average instalments in December are twice or even three times bigger than any other month,” says Anzelika Dobrovolska, Luminor Pension Products Manager.  “Of course, the best would be to take regular care of our welfare in old age. However, there are several reasons why the activity of customers in this matter increases right by the end of a year and why it is worth considering starting saving up 3rd Pillar pension still in 2021.”

Last chance - make payments this year and get a bigger tax return

End of a year is the right time to make payments in 3rd Pillar pension, because knowing your annual gross salary it is possible to precisely calculate the amount of payments to get the tax return already in the beginning of the next year. Making payments in the 3rd Pillar pension by the end of this year, it will be possible to get the income tax return in the amount of 20%.

Getting the income tax return is possible from the instalments in 3rd Pillar pensions and life insurance with a savings component, which do not exceed 10% of the gross salary in these both savings products, but not more than from 4000 euro.

Choose what suits you best and increase your capital

Although the previous profitability may not guarantee any similar results in future, 3rd Pillar pension plans from their very beginning up to this moment have demonstrated positive performance, considerably increasing the capital of our customers. In 3rd Pillar pension it is possible to choose the investment strategy that suits you best, investing in one or several pension plans.

Luminor offers three pension plans – Balanced, Progressive and index plan Sustainable Future.

The plans are different with what part of their assets is invested in stocks. The higher proportion of stocks, the higher the potential profitability, however, one must take into consideration higher risk of short-term fluctuations, therefore, more suitable for short-term savings will be balanced strategy of savings.

In turn, if you have 10 or more years to make savings, pensions plans investing most of the assets in stocks will be a more appropriate choice.

Assets of the new pension plan Sustainable Future are invested in stocks by up to 100%. This plan will be an appropriate choice for younger and middle-aged customers, who would like to earn more, not being afraid of significant fluctuations of the value of assets in the short-term, and make savings by investing in sustainable businesses.

Full safety – capital owned only by you

3rd Pillar pension is very safe and is fully protected from the insolvency of the pension fund, administrator or custodian bank. Pension capital is owned only by the customers - it is kept separately from the money of other customers or the bank.

Inheritable and transferable

3rd Pillar pension capital may be inherited. Moreover, you may specify people in the agreement, who would receive this capital following a simplified procedure in comparison with the standard inheritance procedure provided by the Civil law, which may be rather complicated and time consuming.

3rd Pillar pension capital may be transferred to any other private pension fund registered in Latvia without any commission fees. Likewise, it may be transferred to a pension fund registered in any other member state of the European Union, complying with the requirements of legal enactments. It is very essential, as the customer has a great variety of pension funds to choose from, but at the same time ensuring that the pension capital remains safe.