Thinking about retirement is a decision that should not be postponed. With growing uncertainty about the sustainability of Social Security, more and more people are looking for alternatives that ensure financial stability in old age. According to Ekonomista, a website specializing in finance and economics, Retirement Savings Plans (PPR) stand out as an affordable and flexible solution, although choosing the right product requires some attention.
What is a PPR
A Retirement Savings Plan is a form of long-term savings created to supplement the public pension. It allows you to accumulate capital during your working years and guarantee financial reinforcement when it is time to retire.
PPRs can be structured as investment funds or capitalization insurance, depending on the level of risk the saver is willing to assume and the type of management they prefer.
How to choose the most suitable PPR
Choosing the most appropriate PPR does not mean looking for the one that offers the greatest profitability, but rather the one that fits each person’s profile and objectives. Those who are still far from retirement can take on a little more risk in search of greater long-term gains. Those approaching retirement age should opt for safer alternatives, with guaranteed capital and less volatility.
Pay attention to commissions and redemption rules
The commissions applied to subscription, management and redemption can influence the final income, so it is essential to analyze them carefully. It is also important to know the rules for withdrawing money.
There are PPRs that only allow withdrawals in specific situations such as retirement, serious illness or unemployment, while others allow early withdrawals, although with penalties. Past performance does not guarantee future results, so it is essential to choose a plan that is diversified, transparent and managed by a credible entity.
Use simulators to compare options
To compare options, you can use online simulators. The DECO PROTeste platform allows you to analyze the performance of various PPRs depending on their risk profile and compare them with the product you already have.
The Insurance and Pension Funds Supervisory Authority regularly publishes reports with information on income, commissions and guarantees of PPRs being sold, being an independent and reliable source for those who want to make well-informed decisions.
Guaranteed capital or not
PPRs with guaranteed capital provide greater security, but tend to have more modest returns. Those that do not offer this guarantee can generate higher profits, although they involve greater risk.
The decision must take into account risk tolerance and the time available until retirement. Before subscribing, confirm all details with the management entity including commissions, redemption rules, projected returns and risks. Always ask for complete documentation and clarify any doubts.
PPR transfer
If you already have a PPR but are not satisfied with its performance, know that it is possible to transfer it to another. If the product does not have guaranteed capital, the transfer is free. In other cases, the maximum commission is 0.5 percent. This mobility allows you to adjust the investment to your stage of life or market conditions.
As the same source states, consistency is more important than the amount invested. Even small monthly contributions can accumulate to a significant amount over the years. It is essential to define an amount that can be applied regularly without compromising the family budget.
Campaigns and news
Some financial institutions launch temporary campaigns with special conditions such as reduced commissions or guaranteed minimum returns. These opportunities can be interesting as long as the product is aligned with your profile and objectives.
The new European Pension Product (PEPP) should soon be available. This solution promises greater flexibility and portability between European Union countries, being useful for those who work outside Portugal. However, the fiscal framework in the national territory has not yet been fully defined.
Conscious decision
The time factor is crucial to successful savings. The sooner you start, the better prepared you will be. Choosing a PPR may seem complex, but with information and planning it becomes a safe and conscious decision. If necessary, consult an independent financial advisor to ensure you are making the best decision for your future according to .
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