Malta, like several other nations, is facing challenges posed by an aging population. As the proportion of elderly citizens continues to rise, the burden on the state pension system has increased significantly. At the same time, the low pension income may fall short of providing retirees with a comfortable standard of living. This combination of factors has led to a growing concern about the financial well-being of retirees in Malta.
To address this, it is becoming important for individuals to consider starting a private pension plan. A private pension plan will not only provide government tax rebates to eligible individuals, but will also help individuals to live comfortably after retirement. If you want to continue live a good life after retirement, a private pension plan will provide peace of mind.
Importantly, opting for a private pension plan does not affect the state pension offered by the Maltese government. This means that individuals can enhance their financial security during retirement without compromising their eligibility for the state pension.
The minimum premium required to save each month can vary between the companies offering the plan, making it accessible to a wide range of individuals with different salaries. Additionally, individuals can choose between capital-guaranteed or unit-linked options based on their risk tolerance and investment goals. It is also important to note that charges associated with private pension plans can differ between companies. Therefore, individuals must carefully compare and select a plan that aligns with their financial objective.
Individuals who opt for a private pension may also be eligible for a 25% tax rebate, up to €750, on the amount being saved per year.
Holders of a private pension plan can begin to access their funds when they are between 61 and 70 years old. As per current legislation, up to 30% of the accumulated pension funds can be taken as a lump sum, providing an initial financial cushion, while the remainder is paid out as a regular pension income.
In light of the above, Maltese citizens can seize the opportunity to secure their financial futures by initiating private pension plans, ultimately improving their quality of life in retirement. The earlier you start, the better.