As a young adult, we tend to be less interested in the future than in our everyday concerns. We wonder if we will graduate and if we will find a job that we like, we therefore think about the near future. So, saving money for finance the little things in life such as a car or a trip, getting ready for the pension (which is in eternity) does not seem to be relevant and is of little interest.
However, it goes without saying that one day we will all go to boarding school and it is obvious that to live decently, the pension paid by the government is rarely enough. It is therefore essential to start saving in order to secure additional income and there are some youth saving schemes available for this purpose. In this article, Good finance explains where to start.
What is the pension?
The pension is an income attributed to any person having exercised a professional activity. This right to a pension normally starts at age 65. In 2025, it will be open from 66 years and from 67 years in 2030. It is also possible to take, under certain conditions, an early retirement at age 62 (including having at least 40 years of career). However, taking early retirement can have a consequence on the amount of the pension. Indeed, the latter is notably calculated according to the duration of the career. For this reason, if it is shorter, the amount awarded will be just as much. Thus, in the case of a shorter career, young savings is needed to ensure a comfortable income.
The pension for employees and civil servants
The retirement pension is awarded in Belgium to anyone who has worked for an employer established here. In fact, this person must have performed a professional activity under a contract of employment as a worker or employee. Professionals such as sailors or official journalists are also considered as employees.
In addition, civil servants may benefit from retirement under similar conditions to those of employees. The pension paid usually reaches the legal minimum amount. The latter varies according to the salary, the number of years worked, the status as well as the family situation of the pensioner.
Pension for the self-employed
Self-employed workers, as well as employees and civil servants, are entitled to a pension. This is also 65 years old. It is also possible to take an early or late pension.
However, this pension is still not enough for withdrawals. It must be realized that the standard of living of the self-employed tends to progress over the years. Therefore, it will take a sizeable amount to maintain the same standard of living in retirement. This is why subscribing to a supplementary pension can be a wise choice.
Discover our 5 special young savings tips to prepare for the pension:
1) Plan now!
The present lasts only one time! It is necessary to plan and organize its financial situation. In fact, it is better to opt for young savings as soon as possible so that you can benefit later.
2) Take note of the existence of supplementary pensions
These supplementary pensions are part of the second pillar of the pension system. They can be subscribed by the employer for the benefit of their employees.
Some employers offer group insurance to their employees. It allows employees, through their employer, to build with a financial institution the capital they can have at retirement age. Moreover, employees can pay additional sums to increase their pension capital.