Myth busters: 5 myths vs. facts about pension savings
Keytrade Bank
keytradebank.be
November 30, 2024
3 minutes to read
Pension saving plans are often shrouded in myths and misunderstandings that can deter young people. Yet many of these are more fiction than fact.
That’s why we’re here! To provide you with clear and transparent advice. So we can dispel some of the most persistent myths about pension savings. So that you can confidently build a smart financial future for yourself right now, as quickly as possible.
Myth 1: “Saving for retirement is something for older people”
The Myth
Many young people think that pension savings are something for later in life, when they are older and have more financial resources. Not now, when they are just starting to learn about the labour market and/or are right in the thick of loans for their first car or home, for example.
The Truth
The greatest added value of pension savings lies not so much in how much you invest in your pension every month or every year. It lies in how long you have been saving. Thanks to the compound interest effect, every little contribution you make today will take on ever greater proportions over time, until the day when you retire.
Myth 2: “I'll be all right with my standard pension benefits”
The Myth
Why would you bother to save for your own pension if you are going to receive a nice fat government pension? That's enough, isn't it?
The Truth
On average, a single person who has worked all their life – as of 2024– will receive an estimated minimum of EUR 1,683 euro net per month in the form of pension benefits. If part of a family, this minimum benefit rises to around EUR 1,949 net.
The fact is, yes, you are entitled to this statutory pension benefit, that's correct. But this monthly amount will probably not be enough to keep you enjoying life at the same level of comfort as before. By making additional pension savings, you retain your financial freedom to enjoy your golden years however you want. And the earlier you start, the more difference you can make.
Myth 3: “Pension saving is too complicated”
The Myth
Pension saving means you have to keep going to the bank, negotiating options and conditions, and so on and so forth.
The Truth
Why make things difficult when they can be simple? This is what Keytrade Bank firmly believes. We work that little bit harder than others to make the process as simple and straightforward for you as possible.
Stay low risk, or add just a touch more into your pension savings plan? As soon as your plan is up and running, you can almost forget it.
One way or another, the result is long-term financial security and therefore a pleasant addition to your statutory pension. Some welcome headroom at a time when you just want to enjoy life.
By taking out pension savings, you have the financial freedom to enjoy your golden years as you wish. And the earlier you start, the more of a difference you can make.
Myth 4: “I need a lot of money to start saving for my pension”
The Myth
Only people with a high income can afford to start saving for a pension.
The Truth
As we mentioned above, you don't really need to earn a fortune to start saving for your pension. You can even start with amounts that are low enough that they don't put a strain on your monthly budget. Every euro helps and over time, even the smallest amounts grow into nice sums. You also decide for yourself how and when to make changes to your current pension savings plans.
And if you can afford to put just a little bit more aside and invest 1,020, or 1,310 euro a year, in your pension savings, you will even get money back in the form of a useful tax benefit.
Myth 5: “Pension savings don't offer me enough options”
The Myth
Pension saving involves putting your money into a savings account and waiting it out, without any kind of flexibility. Wouldn't you be better going for gold, cryptocurrencies or other more interesting investments?
The Truth
Pension savings are there for people who want to make their money grow in a safe, risk-free way, as well as for investors who like a little risk.
For example, there are pension savings insurance policies which deliver an insured, guaranteed minimum return. However, you can also opt for a pension savings fund with slightly more risks, and also with a chance of a much higher return. At Keytrade Bank, we pave the way to the ideal solution for you.
And don't forget that you also have your annual tax reduction to add in too. That is, if you do things the right way. You can also decide to reinvest these proceeds each year in one of many other interesting options.
Ready to get started?
Great, we’d love to make it happen for you! At Keytrade Bank, we seek to figure out what is keeping you awake at night right now, and how you envisage your unique, personal future. Then we work together towards that unique, ideal long-term plan.
Ready to talk to Keytrade Bank? Find out more about how pension savings can give you financial peace of mind.
