Pension plans are a savings and investment vehicle to complement the retirement pension and not be afraid that economic capacity will drop when you stop working. The advantages of these financial products are many, highlighting among them those of a fiscal nature, but they are also contracted with a series of conditions that must be respected if we do not want to be penalized.
For example, it is important to meet the deadlines and requirements to dispose of the money invested. In reality, a pension plan is a long-term investment and the bank counts on it, so it is not so easy to request and dispose of the money saved with the plan from one day to the next. Even less if, for whatever reason, it is needed before the time reflected in the contract.
Typically, there are penalties or tolls that must be paid for withdrawing or redeeming money from the plan before reaching retirement. However, with the new legal modifications there are certain exceptions to avoid these ‘sanctions’ and to be able to dispose of all the money that is in the plan.
When to rescue a pension plan without being penalized?
The first assumption, obviously, is when the retirement age is reached and all the requirements stipulated in the pension plan for it are met. However, as we discussed in the previous paragraph, there are new developments in this regard.
First of all, to redeem a pension plan without suffering penalties, one of the following cases must be met, some of which may vary from entity to entity or from one case to another: being legally retired, suffering a permanent disability certified by the Medical Court , be in a situation of dependency and be unemployed, for which you will have to be registered with the SEPE and exhaust all the subsidies to which you are entitled.
Those beneficiaries who inherit it will also be able to access the money from a pension plan, provided that the person who hired it has disappeared.
Apart from these assumptions and from next 2025, it will also be possible to redeem a pension plan based on seniority. In other words, periodic payments will be available (not all the money will be available at once) as long as 10 years have passed since the pension plan was created.
When and how to rescue a pension plan?
It is already known in what circumstances they would be exempt from paying to rescue a pension plan, so the best time to do so is always when we meet the conditions required to avoid having to pay tolls.
Another aspect that must always be taken into account when disposing of the money from a pension plan is taxation. Once we start withdrawing money from this fund to our account, the redeemed amount becomes part of our income. That is, they start to count for the income statement, being able to increase the income that we have to pay annually.
A good way to collect a pension plan and reduce this impact on our annual taxation is to do it periodically. That is, programming spatial inputs in time. Thus, we will charge less, having lower yields than if the entire plan were redeemed from one, and therefore the tax rate that will be used in each income statement will be lower. At the same time, we will better manage all the money saved in the plan.
Rescue pension plan ahead of time: is it possible?
The truth is that it is possible to rescue the pension plan before reaching retirement, but if none of the assumptions raised above are met, the interested party faces the payment of a toll or ‘sanction’, which will reduce our savings.
In fact, there are two types of sanction that will be paid. The first will be the retention for a ransom for a single payment, if you want to obtain all the money from the plan at the same time and you will have to pay the corresponding amount to the Treasury, approximately 21%.
The second type is if it is decided to redeem the plan in an income modality, that is, periodic income instead of a single redemption. Here a percentage of each payment will be withheld depending on the age at which the interested party requests to redeem or withdraw the money from the plan.
