Every year that passes is a lost (or gained) opportunity to plan your retirement more solidly. In 2025, you have until December 31 to make contributions to your pension plan with tax advantages, especially valuable if you haven’t yet taken advantage of this part of the year. In this article, we explain everything you need to know to make the most of the 2025 deadline and how a robo-advisor like inbestMe can make the process easy, efficient, and profitable.
1. What Are Pension Plans?
A private pension plan is a long-term savings instrument designed to accumulate capital that you can use at retirement. It is funded through regular or extraordinary contributions, which go into a professionally managed fund.
To learn more, we recommend reading our article: Pension Plan: How It Works.
Pension plans have certain liquidity restrictions (withdrawals at retirement, unemployment, serious illness, or disability), although they have become more flexible recently, such as the possibility of withdrawing contributions after more than 10 years. We explain it here: New Possibility to Withdraw Pension Plans.
It is also important to debunk common myths about them, such as “they have no liquidity” or “require large amounts.” More details in: Debunking Pension Plan Myths.
2. Tax Benefits of Pension Plans
The main advantage of pension plans in Spain is their taxation: contributions reduce your taxable base in the IRPF (personal income tax), meaning you pay less tax that year.
Key points:
- The maximum deductible amount is limited, especially for individual plans, now €1,500.
- Taxation is deferred: you will pay taxes when you withdraw the plan.
- Transfers between plans do not generate tax impact.
- They are a good complement to other vehicles like index fund portfolios.
You can see more in this article: Pension Plan or Index Fund.
3. Why Contribute Before December 31, 2025
If you make your contributions before the end of the year, you can include them in your 2025 tax return. If you wait until 2026, the 2025 deduction is lost.
Specific advantages:
- You take advantage of your available tax deduction.
- Compound interest starts sooner.
- You don’t leave “money on the table” in deductions.
4. How to Choose the Right Pension Plan
Not all pension plans are the same. When deciding where to contribute, consider the following criteria:
- Risk profile: each person has a different horizon and risk tolerance. At inbestMe, we offer 11 risk profiles, allowing your pension plan portfolio to be precisely tailored.
- Fees: one of the factors that most influences long-term returns. At inbestMe, we keep them low so that more of your money works for you.
- Management efficiency: indexing and ETFs allow inbestMe to build diversified, transparent, and efficient portfolios.
- Expected returns: the combination of low fees and indexing has shown to outperform most traditional pension plans in Spain over long horizons.
- Transparency: it is essential to understand what assets are behind the plan, what costs you pay, and how it evolves.
- Sustainability (SRI): if you want your savings aligned with your values, inbestMe also offers pension plan portfolios with socially responsible criteria.
- Transferability: all private pension plans can be transferred between institutions at no cost and with no tax impact. Avoid other retirement products that do not allow this flexibility.
For more detail: How to Choose the Best Pension Plan and Is a Pension Plan Worth It?
5. Advantages of Having a Pension Plan Portfolio at inbestMe
At inbestMe, we do not offer a single plan, but a portfolio of pension plans designed for you. This structure combines two plans, one in equities and one in fixed income, making it much more versatile and powerful than a single plan:
- Adaptation to your profile: we adjust the combination according to your risk tolerance, time horizon, and retirement goals.
- Evolution over time: your portfolio is not static and adjusts progressively as you approach retirement.
- Automated management: rebalancing and contributions without complications.
- Global diversification: exposure to different regions and assets via low-cost ETFs.
- Low and transparent costs: very competitive fees compared to the banking average.
In short, it is a plan designed for life, with the flexibility and rigor needed to accompany you through every stage of your retirement journey.
Discover more here: inbestMe Pension Plans.
6. Practical Case / Simulation
Let’s see how this works in practice.
Imagine contributing €1,500 in December instead of January:
- You get the tax deduction on your 2025 return.
- Compound interest works one year longer for you.
- If your marginal income tax rate is 30%, the tax savings could be up to €450.
As shown in the chart above, if a young person contributes for 35 years, these amounts could accumulate €209,000, having contributed a total of €52,500 but net of €36,750 (after tax deduction). It can undoubtedly be a good complement to retirement, especially if withdrawals are optimized gradually to minimize taxes.
For more details: Taxation of Pension Plans vs. Index Funds.
What to Do Before the End of the Year:
Quick Checklist
| Step | Not an inbestMe Client | Existing Client Without Pension Plan Account | Existing Client With Pension Plan Account Open |
|---|---|---|---|
| 1 | €1,500 minus what you’ve contributed is the remaining tax space. Consider transferring your pension plans from other institutions to inbestMe if they are not profitable. | €1,500 minus what you’ve contributed is the remaining tax space. Consider transferring your pension plans from other institutions to inbestMe if they are not profitable. | €1,500 minus what you’ve contributed is the remaining tax space. |
| 2 | Sign up with inbestMe by creating your profile → Open Account | Open a new pension plan account from your client area. | Decide whether to make a one-time or regular contribution. |
| 3 | Answer the questions to get your recommended pension plan portfolio profile (you can choose standard or SRI). | Answer the questions to get your recommended pension plan portfolio profile (you can choose standard or SRI). | Once a year, we will review your risk profile to ensure it aligns with your situation. |
| 4 | Make your first contribution before December 31. | Make your first contribution before December 31. | Make the contribution directly from your client area before December 31. |
| 5 | Check that your plan is activated correctly. | Check that the new account is activated correctly. | Check that the contribution is registered in your account. |
Start as Early as Possible
Time is running: the earlier you make your 2025 contributions, the greater the potential effect of compound interest. Don’t wait until the last day; although we accept contributions until 12/26/2025, it doesn’t make sense to delay and risk losing a year of tax deduction.
Also, remember that in our post The 7 Keys to Boost Your Retirement Savings we explain how starting early allows time to work in your favor, reducing the effort needed in the future.
At inbestMe, we offer indexed, automated pension plans with low costs, tailored to each profile, which will adjust year by year to your needs. If you don’t yet have one with us, start today or transfer your plan at no cost. You can now also transfer your pension plans to other institutions more easily by connecting to your bank.
Beyond fiscal considerations, our pension plan portfolios have achieved excellent comparative returns to date.
More information: inbestMe Pension Plans.
