In the world of personal finance, it is essential to have tools that allow us to ensure our economic future, And this future depends on the actions you take today. Pension plan or investment fund? Two of the most popular options, although they present significant differences in their operation, objectives and benefits.
What is a pension plan and what is an investment fund?
A pension plan It is a long -term form of savings designed to complement the public pension after retirement. On the other hand, a Investment Fund Group the money from several investors to invest in different assets, with the aim of growing and obtaining some profitability.
Main differences between a pension plan and an investment fund
OBJECTIVE OF EACH PRODUCT
The first big difference is in your purpose.
A pension plan aims to help you complement your public pension, that is, it is a long -term product designed to ensure specific savings for retirement.
For counterpart, a Investment Fund Its purpose is to grow your money in the medium or long term, but without a concrete purpose.
Liquidity: When can you have money?
One of the aspects in which both products differ and that usually worry more, is the Availability of money.
With a pension plan, Your money is “blocked” to retirement. In other words, you can only recover it before in special cases. It is true that this year the possibility of rescuing contributions with more than 10 years of age enters into force.
The situation differs with Investment funds since they are much more flexible. In fact, you can withdraw your money at any time, without waiting or justifying the withdrawal. Of course, you could face penalties or commissions according to the type of fund.
Taxation: How does it affect your taxes?
In A pension plan The contributions you make reduce the tax base of the IRPF. In other words, you pay less imposed while saving. However, you must keep in mind that at the time of withdrawing the money, it will tax as work performance, which could increase your tax burden on retirement.
Investment funds, For their part, they do not offer tax advantages when contributing money, but they do allow the payment of taxes until you withdraw the investment. In addition, you will only pay taxes for the profits obtained, not for the total investment.
Profitability and risk
Another point to take into account is the difference in risk and profitability.
The pension plans They are usually more conservative, since they are designed for the long term and seek to protect your savings. There are options for Fixed income, variable income either mixedbut they generally offer less profitability than investment funds.