Tailor-made solutions for investment, insurance and finance

Withdrawal plan from a
fund-linked pensions
Insurance: A smart strategy for retirement

Digital innovations - Tax-optimized investments - Individual consulting

Tailor-made solutions for investment, insurance and finance

Withdrawal plan from a
fund-linked pensions
Insurance: A smart strategy for retirement

Digital innovations - Tax-optimized investments - Individual consulting

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Withdrawal plan from a fund-linked
Pension insurance: A smart strategy for retirement

A withdrawal plan from a unit-linked pension insurance policy can be a smart and flexible retirement strategy. This form of retirement savings combines the security of regular payouts with the benefits of continuous investment in funds. In this blog post, we examine the advantages of a withdrawal plan from a unit-linked or ETF-linked pension insurance policy and compare them to the tax implications of a securities account.

1. What is a withdrawal plan?

A withdrawal plan is a strategy in which fixed amounts are regularly withdrawn from an existing investment. In the context of a unit-linked pension insurance, this means that you receive regular payouts from your insurance policy during your retirement, while the remaining capital remains invested in funds.

2. Stay invested despite withdrawals

One of the biggest advantages of a withdrawal plan from a unit-linked pension insurance policy is the ability to continue participating in the capital market. Even during the payout phase, the remaining capital remains invested and can benefit from potential increases in value. This means:

Growth potential: Even after payouts have begun, the remaining capital can continue to grow, which can lead to higher future payouts.
Inflation protection: By investing in funds, you can potentially achieve higher returns, which help you offset inflation and maintain purchasing power.
Flexibility: You can adjust your payouts depending on market developments and your financial needs.

3. Tax advantages compared to a securities account

Another significant advantage of a withdrawal plan from a unit-linked pension insurance policy is the tax benefits compared to a traditional securities account. These include:

Half-income procedure: For payouts after age 62 and a contract term of at least 12 years, only half of the returns are taxed. This is particularly advantageous compared to the withholding tax on capital gains from a securities account.
Subsequent taxation: Taxation only occurs upon payout, not during the savings phase. This allows for a longer tax deferral and can lead to a higher net return.

4. Practical example: Comparison between unit-linked pension insurance and securities account

Unit-linked pension insurance: You withdraw €5,000 annually. The remaining amount stays invested and can continue to grow. Tax is only due upon withdrawal and only on the income portion, with only half of the income being taxed.
Securities account: Here too, you withdraw €5,000 annually. However, withholding tax is due annually on the capital gains, which reduces the growth rate of the remaining capital.

After 10 years, it becomes clear that the capital in the unit-linked pension insurance is usually higher than in the securities account due to the lower tax burden and the compound interest effect.

Read here the complete example.

5. Conclusion

A withdrawal plan from a unit-linked pension insurance policy offers an attractive combination of flexibility, ongoing investment potential, and tax advantages. These aspects make it an excellent option for retirement, especially compared to a traditional securities account. By remaining invested while benefiting from a tax-advantaged payout structure, you can significantly improve your financial security in retirement.