Planning for retirement: Why a private pension plan is essential 

Retirement may seem far away, but planning for it as early as possible is a wise move that many people take too long to make. Retirement planning is an important step to ensure a more financially secure future.  

Some people tend to solely rely on the pension provided by the government, only to realise way too late that it will not be sufficient to retain their desired lifestyle after their retirement. If you want to keep your current financial liberty and maintain your standard of living during retirement, a private pension plan is the smartest way to secure this for your future. 

Why relying on the Maltese government pension may not be enough 

While the government pension provides a basic income during retirement, it is often insufficient to cover the rising costs, such as water, electricity, groceries, and personal expenses essential to maintain your lifestyle. In Malta, pension income is calculated based on lifetime earnings, meaning that those who do not plan may find themselves with limited financial resources in their later years. 

By supplementing your pension with a private pension plan, you can ensure a more comfortable and stress-free retirement.  

When should you start planning for your retirement 

The earlier, the better! Starting a pension plan early allows you to make more contributions and benefit from compounding, meaning your savings grow significantly over time.  

However, it’s never too late to start. Whether you’re in your 20s, 30s, 40s, or even 50s, making smart financial decisions will set you up for a more financially stable future. 

The benefits of a private pension plan 

Financial security and stability: A well-structured pension plan gives you peace of mind by offering you a reliable income stream when you stop working, to supplement the state pension. 

Tax credit: Claim 25% of the contributions allocated to the pension sub-account as a tax credit against income tax chargeable during the year. 

Lump sum upon retirement: Receive a 30% tax-free lump sum along with the remaining balance upon retirement. 

Compounding investing: The returns generated on your pension plan are reinvested, creating a snowball effect. Compounding benefits long-term investments by generating returns on both the original principal invested as well as the accumulated returns from previous periods, thereby multiplying your initial investment exponentially over the long term. 

Pound-cost averaging: Pound-cost averaging is a strategy where you invest a fixed amount regularly instead of putting in a large lump sum all at once. This approach means you purchase fewer units when prices are high and more when prices are low, helping to smooth out the overall cost of your investment over time. 

Protection against inflation: As the cost of living continues to rise, relying solely on the government pension may be challenging to keep up with inflation. A private pension provides an additional cushion to have greater financial power in retirement.  

A plan you control: Unlike the government pension, which is dependent on government policies and economic conditions, a private pension plan puts you in control. You decide how much to contribute, how to invest, and when to withdraw your funds, giving you more flexibility.  

Maintain your lifestyle: A private pension plan helps bridge the gap between the government pension and the income you need to sustain your current lifestyle. Whether it’s travel, hobbies, or simply living comfortably, planning for retirement now ensures you won’t have to compromise later. 

Start today with retirement planning 

Start planning for your retirement today to retain your lifestyle tomorrow. Our private pension plan is a long-term savings plan designed to help you save for your retirement, including several benefits: 

• A 30% tax-free lump sum along with the remaining balance 
• A tax-efficient and flexible pension plan 
• Saving regularly for your retirement with just a minimum of €25 a month 
• 25% of allocated premiums may be claimed as a tax credit against income tax chargeable during the year 
• Appointment of multiple beneficiaries to receive your pension pot when you pass away 
• Pension plan managed by professionals with decades of experience, to ensure greater returns on your investments 

This information is provided solely for educational and informational purposes and should not be construed as investment advice, advice on specific investments or investment decisions, tax advice, legal advice, or any other form of professional or regulatory advice. Investing in this product involves risk. You should conduct your research before making any investment decisions and seek the assistance of a licensed financial advisor. 

Money invested within the Pension Sub-Account may be eligible for a tax credit and will not be accessible before the age of 61. Such tax credits depend on individual circumstances and their amounts, together with Maltese tax legislation, may change in the future. 

The investment value may go down as well as up, and could also be affected by changes in currency exchange rates. You may lose some or all of the money invested. 

Charges will apply should you surrender the Access Sub-Account or transfer the Pension Sub-Account before the Retirement Date. 

Your decision to invest in this product should be based on the full details within the product documentation, which may be accessed through https://cc.com.mt/pensions/private-pension/  

This Product is manufactured by IVALIFE Insurance Ltd and distributed by Calamatta Cuschieri Investment Services Limited. 

Calamatta Cuschieri Investment Services Limited (C 13729) is authorised under the Insurance Distribution Act, Cap 487, to act as an enrolled Tied Insurance Intermediary for IVALIFE Insurance Limited (C 99404). IVALIFE is authorised under the Insurance Business Act, Cap 403, to carry out long-term business in Malta. Both entities are regulated by the Malta Financial Services Authority.