When we talk about preparing for our retirement, pension plans are a popular but often misunderstood option. There are numerous myths and misunderstandings that can divert investors from what can be an extremely useful financial planning tool.
In this article, we are going to debunk some of the most common myths associated with pension plans and highlight the advantages of options such as inbestMe pension plans.
The most widespread myths about pension plans
Despite the importance and popularity of pension plans, there are a series of myths that are important to know and analyze. These myths can lead to misunderstandings and poor decisions when it comes to financial planning for retirement. Below, we will address these myths one by one, providing clarity and more accurate perspective.
They have no liquidity
This myth arises from the idea that pension plans are locked in until retirement. While it is true that they are designed to save in the long term, many plans offer liquidity options in special circumstances, such as serious illnesses, unemployment situations or, in Spain, ten years from the first contribution.
However, it is significant to consider that early access may entail penalties or tax impacts in certain cases. Likewise, it is essential to remember that there is a mechanism that allows the consolidated rights to be transferred from one pension plan to another, at any time and without tax impact.
You need large amounts of capital
Another of the biggest misunderstandings about pension plans is that they require large initial investments and that, in some cases, they are reserved only for large capitals. In reality, most plans allow small, regular contributions.
This makes them accessible to a wide range of different incomes and realities, allowing investors to benefit from compounding even with modest amounts.
You lose the money if the manager goes bankrupt
The security of funds in pension plans is a common concern among participants, especially in the event of bankruptcy of the managing entity. However, the assets are separated from the assets of the management company, so that, even if it goes bankrupt, the consolidated rights will continue to be the property of their owners, passing to another management company.
Furthermore, in most countries, there are strict regulations that protect pension funds by specific entities, even if the managing entity faces financial difficulties.
They are not supervised by any entity
In Spain, pension plans are under the rigorous supervision of the General Directorate of Insurance and Pension Funds, an entity attached to the Ministry of Economy. This department is responsible for applying detailed controls regarding the administration of assets and the general functioning of these financial products.
In addition, Spanish savers also have the support of the Shareholder Ombudsman, a figure dedicated to addressing and processing complaints or claims that participants and beneficiaries may have in relation to the Managing Entity, the Depositary or the Promoting Entity of the Plans. Pensions.
It is better to invest in a bank than in an investment platform
Although banks, still today, bring together the largest offer of pension plans on the market, in recent years investment platforms and fintechs have proliferated as alternatives to these. The choice between investing through one of them depends on the needs and preferences of the investor.
Some of these investment platforms, such as inbestMe, typically offer greater flexibility, personalized investment options and, in many cases, lower fee structures. In addition, they allow access to a wider range of global assets and markets, which can be beneficial for effective portfolio diversification.
Advantages of pension plans
Once the myths about pension plans have been dismantled, let’s see their advantages, especially in comparison with other similar investment products:
- Diversification and personalization: pension plans adapt to different risk profiles and investment objectives, ensuring an investment strategy more aligned with individual needs.
- Transparency and low commissions: Unlike many banking options, pension plans are limited by law on the maximum commissions they can charge the participant. Some entities, such as Inbestme; They stand out for their low commission structure and a policy of total transparency about costs.
- Access to global markets: thanks to pension plans, especially those that replicate global indices, investors have access to a wide range of global assets, allowing international diversification and taking advantage of investment opportunities in different markets.
Invest in pension plans through inbestMe
Thanks to inbestMe, you can invest in the best pension plans on the market. Taking advantage of the usual tax advantages, with the efficiency of indexing and the low costs of automation. And, best of all, with low costs and from €250, so you can take advantage of all their advantages.
What are you waiting for to discover our pension plans? Go to inbestMe.com today and start planning for your retirement.
