The end of the civil year is approaching, and it is time to prepare and take the necessary steps in the financial sphere of the household in general, and in the field of pension savings in particular.
Saving for retirement is one of the most important financial decisions in our lives.
We work, and among other things, we also save for subsistence in the years after retirement from work.
Pension savings for employees has existed for many years.
In 2008, a mandatory pension law was enacted for this sector.
A mandatory pension law for the self-employed was enacted only in 2017.
In the law, the amounts of mandatory pension deposits for the self-employed and self-employed are determined, along with tax benefits and adjustments in the National Insurance Law, which can make it possible to save and live in financial well-being after retirement.
The law applies to exempt dealers and licensed dealers.
The money can be deposited into a pension fund, managers' insurance or a provident fund - at the choice of the depositors.
How much is required to deposit?
For the year 2022, the deposit obligation is between 2,900 and 10,800 shekels, as a result of the income.
You can deposit in regular monthly deposits or in a lump sum, or a combination of the two.
At the end of the tax year, the deposits can be updated according to the actual income.
The pension allowance will decrease at retirement age // Photo illustration: GettyImages // The pension allowance will decrease at retirement age,
It is also possible to deposit additional amounts beyond the tax benefit ceiling, but these amounts will not be eligible for this benefit as stated.
You can deposit them in the same pension instrument where you deposit the amounts that must be deposited, but you can also do this for other pension instruments.
The maximum amount is divided into a third that allows tax credit up to an annual ceiling and two thirds for tax deduction, and the amount of the deduction is a result of the personal tax bracket.
The tax benefit can amount to thousands of shekels per year, and the higher the income - naturally, the higher the financial amount of the benefit.
One of the important questions in this context is what will be the amount of the monthly allowance that will be available upon retirement, and if it will allow a life at a level similar to the current one.
That is why it is appropriate to prepare, preferably one hour before, with the help of professional advice and clarification of these important questions.
Approaching the end of the tax year is a good time for this.
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