The private pension market is more diversified, with products and strategies for different risk levels and customized solutions to meet the investor’s objective and profile.
Numbers from Fenaprevi (National Federation of Private Pension and Life) show a booming sector. In the third quarter of this year, private pension plans in Brazil totaled R$ 41.7 billion, an increase of 18.8% in relation to the same period of the previous year.
The VGBL plan (Vida Gerador de Benefício Livre) continues to be the product with the highest volume of contributions among Brazilians, with R$ 38.9 billion in premiums and contributions – growth of 19.8% compared to the third quarter of last year. The PGBL (Free Benefit Generator Plan) has R$ 2.6 billion.
Indicators may be optimistic, but that does not mean that private pensions are the most appropriate investment for all cases, say experts.
João Batista Ângelo, member of Fenaprevi’s Committee on Products for Survival, says that knowing how long to keep the money invested is important, as private pension benefits investors who see the long term. On the other hand, it is not attractive for those who expect faster returns, who may find more advantage in investments with lower rates in the short term.
For this reason, pension plans are not seen as an absolute competitive product, says Ângelo. “We understand that social security is a complement among the investment options of Brazilian workers who have the possibility of saving resources.”
For the investment adviser and columnist for Sheet Michael Viriato, private pension is an excellent accumulation instrument, and among the main advantages are tax benefits and ease in the succession of assets.
“To take advantage of the tax benefit, it is important to consider some criteria: the first is time.”
For example, for those who choose taxation by the regressive table, the IR (Income Tax) rate decreases according to the time in which the resources remain applied. If the withdrawal is made after ten years, the rate is 10%. When the withdrawal is made within two years, it rises to 35%. Other types of investment have income tax percentages that vary between 15% and 27.5%.
There is also the option of progressive taxation, which starts at 7.5% and can reach 27.5%, in addition to the portion to be deducted from each bracket. In this case, the percentage varies according to the investor’s income.
Walter Mendes, president of Vivest, says that awareness of the importance of guaranteeing a supplement to official retirement is still not generalized in the country, due to the lack of financial education and the economic instability of recent decades.
“The worker only tends to think about retirement when it’s close, when in reality the pension savings is something to be built over time.”
Concerned with teaching her children and grandchildren about the importance of this planning, researcher and doctor in financial education Rosa Vilches, 61, decided to set an example. Currently, she invests in three private pension plans, a modality she chose because she felt more secure.
Of the three policies, one was contracted for herself, who dreams of having a birthday party when she turns 100 years old. The other two are for the grandchildren, both three years old.
“In addition to ensuring a better structure for when they are adults, the objective is to teach them to think about the future. That’s why I need to set an example. I can only educate if I show it with my attitudes.”
Option for those who want to retire and supplement their income
Knowing what to do when the resource is redeemed is also important before joining a private pension plan. One of the goals sought by investors is to have money as a complement to retirement.
For experts, social security is an interesting product for those seeking this goal.
According to Viriato, a worker who starts investing BRL 4,000 monthly in a VGBL plan (generally indicated for taxpayers who make the simplified income tax return) of fixed income from the age of 40 will be able to retire at 65 with an income extra R$ 10 thousand per month.
“For the case of investment in retirement with an accumulation period of 25 years, the advantage of social security is great. [antecipação semestral do IR sobre rendimento de fundos de renda fixa, multimercados e cambiais]🇧🇷
In a long-term investment, the return is higher for a fixed-income VGBL plan, which yields IPCA more than 6% per year, than a fund with the same type of return.
“I assumed that the IPCA plus 6% per year equals an expected return of 12% per year. By saving BRL 4,000 per month in VGBL with this profitability, the investor will have what it takes to retire with BRL 10,000 at today’s prices .”
To pay for the children’s college, social security is not usually the best option
If the objective is to save money to pay for the children’s college, social security may not be the best option, says Cintia Senna, financial educator at DSOP. Again, it is necessary to consider the ‘time’ aspect to assess whether it is a good deal.
Consider the case of parents who want to make an investment to pay for six years of college for their child, at an estimated price of R$7,000 per month.
In a simulation, in order to be able to pay this monthly fee of R$7,000 per month over six years, it would be necessary to accumulate an amount close to R$504,000, disregarding period inflation and income tax.
To obtain this amount, it would be necessary to make a monthly investment of R$ 820.23, for a period of 18 years, considering a yield of 0.85% per month, an estimate based on the rates currently practiced in the market.
According to the financial educator, due to the impact of the IR that would be charged on the total amount invested, plus the administration fee, other types of investment would be more suitable for this purpose. Among the suggestions are fixed income investment funds, CDBs, Direct Treasury (IPCA Treasury), LCI and LCA, among others.
Product is indicated for estate succession plan
Private pension is indicated for those who do the succession planning of assets. In this case, the most suitable plan would be the VGBL, in which the IR will be levied only on the amount you earn, and not on the entire amount invested.
DSOP ran a simulation with a 70-year-old man who plans to leave part of his inheritance to his grandchildren. Considering that he has assets of R$ 5 million and leaves this amount invested for one year –using the progressive table— he would have a rate of 27.5% on what he earned. In this case, the basis is the amount he earned for each of the grandchildren, if there are more than ten grandchildren, the rate may drop to 22.5%. If the regressive table were considered, the rate would be 35%.
In addition to the tax issue, the pension plan is interesting in this case since the amount applied does not go through probate.
Another advantage is that grandparents can define the percentage that each grandchild can receive. That is, it serves as if it were the will.
“It is interesting to note that the amounts defined in private pension, depending on the state, are free from ITCMD [Imposto sobre Transmissão Causa Mortis e Doação de Quaisquer bens ou Direitos]”, says Cynthia.
If the objective is a trip, the pension is not usually advantageous
In the case of an 18-year-old student who dreams of taking a sabbatical when he turns 35, private pension plans are not the most interesting option either.
If the objective is to accumulate R$ 100 thousand to spend 12 months traveling (assuming that, for this, he spends an average of US$ 50 per day), he would need to invest R$ 227.20 monthly during the 17 years (204 months) considering an income of 0.85% per month.
At the end of the contract, the investor would have accumulated R$ 123,542.20. At the time of redemption, he will have an Income Tax of R$ 23,541.79 on the progressive table, leaving with the amount necessary to carry out the trip.
“If, on the other hand, instead of using social security, she used a CDB, a Direct Treasury Bond, considering the same profitability, she would need to save and invest every month the equivalent of R$ 202.92”, says Cintia.
If he had opted for a fixed-income investment, he would have had a lower income tax rate (15%), an amount that would only be withdrawn on what he earned and not on the total amount.
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