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Taxation of the income portion of private pension insurance policies
Insurance tip on the topic of private pension insurance
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The taxation of private pension insurance
Taxes are a constant companion throughout life. This also applies to private pension insurance, which is not exempt from tax considerations.
The question arises as to how high the Taxation of private pension insurance the amount of the pension that will be paid and what amount will actually be available as net pension.
The taxation of statutory pensions differs, for example, from the taxation of private pension insurance.
Additionally, the Type of pension payment (whether the entire capital is paid out at the start of the pension or monthly pension payments are made until the end of life) plays a role in determining the taxation.
If a lifelong pension The payout from your private pension insurance will be processed as follows: Calculation of the tax burden based on the income portion. This tax concept is also known as income-based taxation.With the income-based taxation, a tax rate of an average of 4–7 % on capital gains is possible in retirement – this is a uniquely low taxation option on the German financial market.
The taxation of the income portion
The so-called The taxation of the income portion is governed by Section 22 of the Income Tax Act (EStG). anchored. Depending on when you want to start receiving your lifelong monthly pension from your private pension insurance, a percentage calculation of the tax burden.
It is important to note that your age at the time of your first pension payment determines what portion of your pension is subject to tax deduction.
The tax burden decreases the later you first receive a pension.
The tax burden decreases the later you first receive a pension.
The percentage of income tax does not represent the actual amount of tax you have to pay. Rather, it is the portion of your pension that is subject to taxation. In our consultations, we repeatedly encounter confusion regarding this aspect.
If you'd like more clarity on how the taxation of the income portion of your private pension plan works, we're here to help. Schedule a consultation today to get your individual questions answered and make an informed decision about your retirement savings. Your financial security is important to us – let's find the best possible solution for you together.