Retirement is a right granted to every Brazilian citizen who has made contributions to the National Institute of Social Security (INSS) for a certain period of time. In addition to common retirement, there are other benefits to taxpayers granted through the INSS, such as disability leave, maternity leave, sick pay and prison aid, for example.
When the worker is hired through the Consolidation of Labor Laws (CLT) regime, it is the company itself that transfers the financial contribution to the INSS, through discounts applied to wages. When a person is self-employed, this transfer is their own responsibility, through the monthly contribution.
In the case of Individual Microentrepreneurs (MEIs), this contribution is included in the Simples Nacional payment.
However, the remuneration transferred by the INSS after applying for retirement is calculated according to certain criteria, such as the contribution made by the worker. That is, the retirement granted will be proportional to the contribution made over the years, and cannot exceed the ceiling, which is currently R$ 7,507.49, but not everyone manages to retire for that amount.
As the income of entrepreneurs can be higher than this value, many question whether the common retirement would be enough income to maintain their standard of living when reaching old age. Therefore, many choose to take out a private pension plan, which is much more flexible and advantageous, and allows for higher financial contributions.
There are two main types of private pension plans offered by banks and credit companies: Plano Gerador de Benefício Livre (PGBL) and Vida Gerador Benefício Livre (VGBL).
The first is more suitable for people who submit a complete declaration to the Federal Revenue and allows the user to deduct the contribution invested in income tax, up to a maximum limit of 12% of taxable income.
The second is more suitable for people who make a simplified income tax return, not allowing the amount to be deducted.
Private pension is a great possibility to guarantee stability and comfort in the future. Among the main advantages of this retirement model, there is the lack of a minimum age, there is greater flexibility in contributions and in the way of accessing the money, being able to adapt it to different scenarios, if necessary.
In addition, it allows for patrimonial succession, being able to name a beneficiary (such as spouse and children), who may receive the benefit, in case of death.
Read more: How to declare PGBL and VGBL in IRPF 2023
With Deduction Portal information