Are you confident about retirement and bad things about what is happening to your pension? Would you like to have a reserve ready when you retire? Do you want to get maximum return from your disputes at the cost of direct risk? Luk Urbnek, Partners’ consultant, explains how to do it.
1.Potential to overcome inflation
Mlokter realizes that his biggest problem is inflation. Inflation is an invisible routine dispute and needs to be addressed. Transformed Pension Funds (TFs) cannot and will not overcome inflation. Their strategy does not allow them to do so (guarantee of indisputable evaluation).
With its average input, it lags behind by 0.7%, which means that over a 15-year horizon, disputes will lose about 10% of their value. The supplementary pension scheme (DPS) allows you to set a more dynamic strategy (with more action). The first stock portfolio is a testament to pekonn inflation in the long run.
Any return automatically means your risk. When connected for a period of 10, 15 or more years, the risk is reduced. From the point of view of inflation, long-term investments in the equity portfolio are safe in government bonds. The risk in the case of supplementary pension savings (DPS) can be characterized as a temporary loss of value of disputes. It is the bottom of the fact that stock markets are more volatile in the short term (more fluctuating), but in the long run they achieve higher returns than unchanged bonds.
If we deal with the difference in income between government bonds in the transformed pension fund (TF) and shares (DPS dynamic strategy) in the amount of 3 percentage points, we can ultimately act in the amount of 250,000 crowns (the result is compared to 160 real clients) offices). In the last 7 years alone, the difference between TF and DPS inputs with a dynamic strategy is more than 60%. And that’s the difference that is worth thinking about.
3.Possibility to change the company’s pension
Since 2013, all TF clients have been held hostage by their pension companies. At the same time, the achieved returns can differ significantly in individual years and even in the long run. The difference between the best and the worst fund is 0.71 percentage point. At 15 years, therefore, the difference was about 10% in the value of disputes. If the client of the pension company moves from TF to DPS, the pension company will subsequently change. If you save a total of 5 years, the change of pension company is free. Otherwise for a fee of 800 crowns. Pension companies do not inform clients about the possibility of going to the PCB.
4.Vt flexibility in spoen
It would be nice to read here that the PCB has nothing to do with the connection. It is a purebred investment in securities (bonds, stocks). Each time a pension company offers a mandatory one conservative fund and then several other dynamic strategies. Each client can then set their strategy individually and a change in the settings can be made free of charge every year.
5.Monost to go to the advance
One of the benefits and advantages of DPS is the ability to retire. It should be noted that this option can be obtained at any time and go from TF to PCB. It is possible to retire up to 5 years before reaching retirement age, but the condition is disputes over the payment of annuity in the amount of 30% of the average gross wage. The advantage of pre-retirement is that this time is anchored in the time worked and then has a positive effect on old-age retirement.
When does the transition from TF to DPS not pay off?
Each coin, of course, has two sides. So the transition from TF is not for kadho. If we have more than 5 years and we are fulfilling our disputes to choose in the form of a one-time settlement, it probably does not make sense to make this change. At the same time, if we are fulfilling ourselves to tunnel pension disputes in the near future by choosing a retirement pension after 15 years of savings, there is no need to change anything. For all other cases, the transition to the PCB will probably be suitable.
Is the change appropriate even in the current situation where financial markets have fallen by 30%? Even the most suitable for the entire period of existence of the supplementary pension savings. The fall in the markets of around 30% is, from an investment point of view, the complexity is not a cause for concern.
In history, it has been possible to observe a total of 12 significant declines in the financial markets since 1945, with an average decline of 27% (mostly in 2008 2009, when it was a decline of 56%). But it was possible to watch the revival of the financial market in the coming months. When after one year the markets yielded on average 15%, after those years 46% and after 5 years even 120% (source: financial magazine FONDSHOP 6/2020).
We do not know how the current situation will develop, but we do know that two or later financial markets will lose money. Companies can opt to produce, sell, earn and generate stock profits. The economy is turning to the norm. From the point of view of the horizon of 5 and more years, it is therefore an interesting baldness.
What to do if her PCB mm?
Congratulations, but neither do you. Check your contract settings to see if the strategy for the contracts is in line with your investment horizon. At the horizon of over 15 years, the only first variant is a dynamic strategy. With a short horizon and a higher value of disputes (those who made the transition), the strategy should be conservative according to the individual situation of the investor.