Supplementary Pension Plans: Who Qualifies and What You Get
Learn how supplementary pension plans can help you save for retirement with specific tax advantages in Brazil.
Supplementary Pension Plans are private savings options designed to provide extra income during your retirement years beyond what the standard social security system offers.
Who it's for
This is for any citizen who wants to add to their existing social security benefits to ensure more financial stability in the future.
What you get
You receive access to long-term savings plans that offer specific tax advantages. These plans allow you to build a private fund that you can draw from once you stop working.
What it costs you
To participate, you make regular monthly contributions. Additionally, you will need to pay management fees, which change depending on which bank or financial institution you choose.
The catch to know
You must decide between two different types of plans: PGBL or VGBL. In a PGBL plan, you can reduce the amount of income tax you pay now, but you will be taxed on the total amount when you withdraw it. In a VGBL plan, you are only taxed on the money you earned through interest and growth, rather than the total sum.
How to apply
- Research the different types of plans available.
- Compare the management fees offered by various banks.
- Choose the plan type that fits your tax situation.
- Contact a financial institution to set up your monthly contributions.