The end of the year arrives and many people ask themselves: what to do with the money from your 13th salary? Between paying off debts, buying a vacation trip and spending it all on Christmas gifts, one option to consider is making a contribution to the private pension. But is it worth leaving that money in provident funds?
How is the 13th salary paid?
The 13th salary is paid in up to two installments, according to current labor legislation. The first corresponds to 50% of the total value of the benefit, without discounts. The second installment includes INSS discounts and Income Taxwhen applicable.
This payment is made in the same way as the professional’s salary, varying according to the method chosen at the time of hiring. It can be done in your salary account, via portability, Pix, transfer or even given in kind by the employer.
What to do with the money?
“Investing your 13th salary in a private pension can be an alternative, especially for those who want to ensure greater financial security in retirement”, assesses Eduardo Rahal, chief analyst at Levante Inside Corp.
For the expert, the main benefit of investing your 13th salary in a private pension is the financial discipline that this choice promotes, helping to avoid impulsive spending, especially at the end of the year, when offers pop up for Christmas and New Year’s Eve.
There are also significant tax advantages: in the case of PGBL, It is possible to reduce the income tax calculation basegenerating immediate savings; In the case of both plans, long-term regressive taxation can reduce the rate to just 10% after 10 years. This investment also takes advantage of the effect compound interestenhancing the growth of assets over time.
Prioritize debts
You need to be aware of some situations before putting your 13th salary into a private pension plan. Think that this money will (or should) only be redeemed in the next ten years or more, so that the income is worth it. Therefore, it is necessary to know whether there are other emergencies to be resolved, especially the debts.
“A large part of the population is in debt, therefore, before investing, what a person should prioritize, as in the case of the 13th salary, is to reduce their debts”, explains Jarbas Tahuany Santos de Almeida, finance professor at Strong Business School . “Among the debts that Brazilians incur most is special check. And, starting next year, interest rates in the economy are expected to rise, reaching more than 12%. If people don’t start reducing their debt, with higher interest rates, the tendency is for the debt to get even bigger.”
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Choose the plan
Rahal remembers that before allocating extra income to private pensions and paying off debts impacted by high interest rates, it is important for investors to evaluate their available budget, ensuring that end-of-year expenses are covered.
“If your financial situation is in order, the next step is to choose the pension plan that best suits your needs. The PGBL is ideal for those who file a full Income Tax declaration, as it allows them to deduct up to 12% of their annual gross income, reducing the tax payable. VGBL is more suitable for those who file a simplified declaration or are exempt, as taxation upon redemption only applies to income”, explains the chief analyst at Levante Inside Corp.
Contributions made until the end of the year can be considered in the IR declaration the following year, which offers an immediate tax benefit, especially in the case of PGBL. If the idea is to invest for the long term, bolder plans with exposure to variable income can bring better returns, while more conservative plans are suitable for those who are closer to retirement.
Assess the risks
Fernando Camargo Luiz, manager of Trópico Investimentos, reinforces that pension plans aim to create long-term ‘savings’. “The allocated resources cannot take unnecessary risks, which often lead to considerable loss of assets. Therefore, caution is needed.”
The manager of Trópico Investimentos remembers that the pension funds available on the market vary in terms of risk and strategy. And you need to be careful when making the choice. “Although more than 60% of the volume is invested in public securities, a considerable part — almost 30% of the assets of these institutions — is allocated to fixed income securities. The rest is divided between shares and other assets”, says Luiz.
“Even though it is a good long-term asset, you need to be careful with this type of exposure. The performance of the income will depend on the choice of what will make up the portfolio”, reinforces manager Fernando Camargo Luiz.
