As the tax calendar approaches its end, there is a detail that continues to go unnoticed by many taxpayers and which could result in significant relief on the IRS bill. What is at stake is the reinforcement of Retirement Savings Plans (PPR) until December 31st, a simple gesture that could mean hundreds of euros to be recovered in the next settlement with the Tax Authorities.
According to DECO PROteste, the tax benefits associated with PPR remain among the clearest and most predictable in the Portuguese tax system. The mechanism is straightforward: whoever reinforces their PPR within the calendar year can deduct 20% of the amount invested in IRS, up to a limit that varies depending on age.
For taxpayers under 35 years of age, the maximum deduction ceiling is 400 euros, which requires an investment of 2,000 euros. Between the ages of 35 and 50, the limit drops to 350 euros, with a minimum increase of 1,750 euros. From the age of 50, the maximum deduction is 300 euros, reached with a reinforcement of 1,500 euros. These values only apply to contributions made before legal retirement age.
What many forget when doing the math
One of the most common misconceptions is the idea that reinforcing above these values increases the deduction. It doesn’t increase. The tax benefit has a clear ceiling. Even so, additional amounts continue to reinforce retirement savings, even if they no longer bring an immediate tax advantage.
Another relevant aspect is the case of couples. It is possible to obtain two IRS deductions, as long as each member of the couple has their own PPR. A single joint plan does not double the benefit. This distinction makes a difference for many households and remains one of the most effective strategies for maximizing reimbursement.
According to , a website specializing in economics and current affairs, this is one of the few tax deductions that still allows for some last-minute planning, as long as the reinforcement is made by December 31st and duly communicated to the Tax Authority.
Pay attention to the redemption rules
Not all PPRs entitle you to tax benefits. Plans that allow free redemption at any time do not fall under the IRS deduction regime, precisely because they do not meet the long-term savings objective that the law intends to encourage.
Furthermore, early redemptions outside the legally stipulated conditions imply the return of deductions obtained in previous years, plus a penalty of 10% for each year that has elapsed. It is therefore essential to know the rules of the product well before investing.
The law provides, however, for several situations in which redemption can be made without penalty. These include old-age retirement, long-term unemployment, permanent disability, serious illness or the payment of mortgage loan installments, as long as the legal deadlines are met.
Exceptional regime continues until 2025
There is also one detail that has been particularly relevant in recent years. The Government maintains in force, until December 31, 2025, an exceptional regime that allows the redemption of PPR, PPR/E and PPE without penalties, up to the monthly limit of the Social Support Index. In 2025, this value corresponds to 522.50 euros per month.
This regime also allows for broader redemptions for the payment of housing loans or deliveries to housing cooperatives, as well as greater flexibility in early loan repayment, with reinforced annual ceilings.
The real impact on the IRS
Before reinforcing the PPR, it is prudent to check the global limit of collection deductions, which depends on income and other expenses already declared, such as health, education or household expenses. The previous year’s IRS settlement note is a good basis for understanding whether there is still room to fully take advantage of the benefit.
Reinforcing the PPR until the end of the year could be the last financial gesture of 2025 with a direct impact on the IRS of 2026. For many taxpayers, it means recovering up to 400 euros. For others, it is above all a way to reinforce retirement savings with a tax advantage that is difficult to match in other products. Time is ticking.
Also read:
