Have you planned your future?

As the end of the year approaches, most people wonder what they can do to pay less tax next year, but maybe this is not the right question to ask. Perhaps it would be better to ask whether we will have enough money when we retire and whether we have planned for our future.

Regarding the first question, that of paying less to the Treasury, the truth is that we can do less and less from an individual point of view, as legislative changes in recent years have reduced the tax advantages derived from savings contributions such as Individual Pension Plans. It is true that there are still tax incentives for group savings products promoted by companies, such as collective savings insurance contracts without charging premiums to employees, thank goodness.

Now that it is trendy to talk about Europe and catching up with European countries, it would also be advisable for the legislator to take a look at what is being done in other countries to promote savings and get down to work. There is still a long way to go in this area.

On the second issue, planning for our future, we will have two main sources of income when we retire. On the one hand, the income reveived from the Social Security system, and on the other hand, what we are able to save, either individually or through company-sponsored savings schemes. The first part, after the legislative reforms of the last few years, is becoming progressively smaller, so we will have to consider how we can influence the amount coming from our personal savings.

Regarding personal savings, a few tips: 

• Plan, the best way to plan is to get the numbers right.
• The sooner you start the better, time can be our ally or our worst enemy.
• Define your objectives, think long term
• Take advantage of the savings systems that your employer is giving you. 

In the end, we all want to live well when we retire, so dedicate a little of what you earn to saving, don’t overlook the different opportunities that your company offers you and take advantage of new developments, both legislative and new products, that can benefit you. As it is said in the English-speaking world, stay tuned! 

Blas del Pozo

Director Asociado Bienestar Financiero / Previsión Social