Pension savings more attractive for self-employed again
January 2024 - Increased interest rates are making retirement savings attractive again for the self-employed. We take a closer look at the various forms of saving through the second and third pillars.
Third-pillar retirement savings involve savings where a deposit of 990 euros (1,270 euros) entitles you to a tax reduction of 30 (25) per cent. In long-term savings, a deposit of 2,350 euros entitles you to a tax reduction of 30 per cent.
Free supplementary pension for the self-employed (VAPZ)
Within the PSPS, self-employed people are allowed to deposit 8.17 per cent of their net taxable income, with a maximum of EUR 3,859.40 for 2023. Under the social PSPS, savers enjoy additional social protection, for example in case of incapacity for work. For a social PSPS, 9.40 per cent of net taxable income may be deposited, with a maximum of EUR 4,440.43 for 2023.
Benefits
Deposits can be fully deducted as professional expenses (subject to timely payment).
Savers have to pay fewer social security contributions as net income is lower.
Disadvantage
Return is limited because deposits must be accompanied by a capital guarantee (branch 21 insurance).
Guaranteed interest rates were at 0 to 0.5 per cent for a long time. Including profit sharing, returns then approached 1 to 1.5 per cent per year. Today, due to increased interest rates, guaranteed returns are in the region of 1.5 to 2 per cent. At the same time, more insurers are investing the profit shares from branch 21 policies in branch 23 funds with higher potential returns.
Individual pension commitment (IPT)
Advantages
Free choice between branch 21 and branch 23 investments
Back service: the years when no deposit was made can be 'caught up' by savers
Premiums are 100 per cent deductible
Free supplementary pension for the self-employed as a natural person (VAPZNP) or pension agreement for the self-employed (POZ)
A second option for tax-advantaged savings for the self-employed without a company. This is the free supplementary pension for the self-employed as natural persons (VAPZNP), also known as the pension agreement for the self-employed (POZ).
Disadvantage
A premium tax of 4.4 per cent applies on each deposit into the VAPZNP.
A tax reduction of 30 per cent in personal income tax applies on each deposit.
Advantage
As with the IPT, with a VAPZNP a self-employed person can opt for a branch 21, a branch 23 or a combination of the two.
