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We can recover up to 280,000
As we’ve written several times, it’s possible to initiate payments to our voluntary fund, pension insurance, or retirement savings account before the end of the year to maximize the state support that comes with payments.
- the voluntary pension funds annually up to 150 thousand we can claim a HUF tax credit,
- a pension insurance after a maximum of yearly 130 thousand florins fiscal credit,
- a in your retirement savings account (NYESZ) 100 thousand florins the annual tax credit limit.
In all three cases, the amount of the tax credit is compared to our annual payment, in proportion to which, according to the above limits, we can use a state subsidy of 20%, which we can also invest in the account.
It is important that together we can claim a maximum of 280,000 HUF PIT for these products.
What is definitely worth keeping in mind is that
- the tax credit is not automatic, we must claim it on our tax return,
- We can only claim a tax credit if we pay the personal income tax.
If someone has claimed the PIT through a kata entrepreneur, unemployed person or a family tax credit, they cannot take advantage of the tax credit option for retirement savings.
According to MNB statistics, pension insurance and voluntary pension funds manage more than HUF 2 billion in assets, while Hungarians own only a fifth of them in NYESZ.
In terms of the number of contracts, voluntary funds have the majority of members, but the number of NYESZ accounts is decreasing year on year:
Which one is worth choosing?
ÖNYP
The voluntary pension fund your advantagethat:
- here the maximum tax credit is the highest (150 thousand HUF together with the tax credit used for health and self-help funds),
- This is the most convenient form of savings, since we can practically only use actively managed wallets, making it difficult to wear a vest,
- after ten years we have access to the refund,
- Employer contribution can also increase set-aside and furthermore, since 2019, the tax credit can also be used after employer contributions, not just individual contributions.
Disadvantagethat:
- if we get stuck in ten years, we won’t have access to it, in the form of a maximum membership loan, which can mean significant additional costs.
This year, the MNB also published the Total Cost Indicators (TKM) for voluntary pension funds, which have been available for many years for savings life insurance, making pension funds comparable not only with each other, but also with its main rival, pension insurance. TKM numbers show: pension funds deduct an annual cost of 0.33-2.55% over a period of 10 years, which is usually less than the burden of 1.89 to 5.69% of the pension insurance.
Pension insurance
Pension insurance your advantagethat:
- the consultant, the insurer, urges us to pay our savings regularly,
- We can buy a series of extras, such as risk supplements (that is, for incapacity for work; it can also cover disability, long-term illness), basic death insurance, premium coverage, exchange rate control (not necessarily an advantage, we’ve written about it here), in many cases free wallets. possibility of modification,
Disadvantage Y:
- It can be the most expensive product if we do not choose well, if we do not pay regularly, during the predetermined period, and if we cancel after the first 1-2 years, we can lose 80-100% of our capital (since the already used we must return the tax credit increased by 20%).
It should be noted that there are two types of savings available in pension insurance: unit-linked and guaranteed (mixed). In the first, the client has to choose between asset funds (essentially mutual funds), while in the second the insurer invests our savings (in risk-averse assets, typically government securities) and also pays some guaranteed return (technical interest , generally less than the total cost of the product).
NYESZ
THE NYESZ your advantagethat:
- here is the widest selection of investment instruments, as we can choose not only investment units / units, but also bonds, stocks and other instruments,
- if used well it is the cheapest way to save,
- if we have to break the bill in the short term, this is where we suffer the least loss,
Disadvantagethat:
- the wide variety of options can be embarrassing for less financially conscious clients,
- the maximum tax credit rate of 20% is the lowest here (100 thousand HUF, in the case of retirees before 2020 130 thousand HUF),
- in the case of inheritance, the right to the tax credit is lost.
Taxes
In addition to state subsidized pension savings (NYESZ, pension insurance, voluntary pension fund), not only can PIT credits be claimed, but if held to maturity they are also tax-free, allowing save 15% in interest on mutual funds, stocks, bonds and deposits. , also PIT. However, if we break these products before expiration, we may have to tax, according to the following parameters:
TBSZ
Although there is no tax credit for the Long Term Investment Account (TBSZ), we can save a lot of time by opening our account at the end of the year, as the five-year interest tax exemption period begins in January of next year. Since the year of opening an account is the year of collection, we can save this year by opening this year.
Interest tax burden on assets held in TBSZ
- After 3 years at 10%
- After 5 years, it decreases to 0%.
Cover image: Getty Images
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