25th January 2024

S-Pension: a great plan for the future of all workers in Luxembourg

Halfway through our careers, we look back and wonder why we didn’t think about the future sooner. Did you know that even as a non-resident, you can take out a supplementary pension, with all its benefits? Why is the S-Pension private pension scheme the right choice at this stage in your life?

Eric is one of the many cross-border commuters working in Luxembourg. With his small family, his wife and two children, he has built a great life for himself. Approaching his forties, he takes the time to reflect on his career, his future and his retirement dreams.

Retirement: hoping it will come one day!

What is the outlook for the next 20-25 years? No-one has a crystal ball to predict what the future holds.

With all the current upheavals in our society, the retirement age could rise and pension payments could fall.

Since we never know what the future will bring, being proactive and starting to build a pension pot seems urgent for Eric.

Prevention is better than cure

... he says to himself, and he begins to find out more about options for private pension schemes (i.e. supplementary pension schemes).

Strong arguments for taking out a private pension scheme around halfway through your career

At the end of his research, Eric ends up finding some strong arguments:

Assessing his retirement goals:

Eric knows what he still wants to achieve in his life and is aware that the amount of his pension will be significantly lower than his current salary. A private pension scheme will undoubtedly be crucial in achieving his goals;

Maximising contributions to a private pension scheme:

now that he is halfway through his career, Eric is able to maximise his pension scheme contributions and will be able to strengthen his financial safety net for retirement.

Building a “rainy-day fund”:

yes, rainy days can happen! Eric has already experienced ups and downs in his life and knows the importance of increasing his financial security.

Aligning the plan with his career development:

approaching his forties, Eric thinks that he may want to take on new challenges... without forgetting to put something aside for the future!

Growing his pension pot:

with 20 to 25 years of working life ahead of him, he will have enough time to grow and maximise his returns. With a contribution of €267/month*, he will be able to build a good long-term reserve.

(*) €267 per month allows you to reach the tax-deductible ceiling of €3,200/year

A compelling reason – tax benefits!

Although Eric is not a Luxembourg resident, he earns more than 90% (*) of his professional income in Luxembourg and is therefore considered a resident taxpayer and benefits from the same deductions and allowances as Luxembourg residents.

(*) 50% for residents of Belgium

Since “the 2017 fiscal year, premiums paid to a private pension plan can be deducted up to a maximum of EUR 3,200 per yearregardless of the age of the policyholder*.

The maximum limit allowed under the tax deduction scheme is individual and is established separately for each spouse who has concluded a pension plan."

Source: Deducting the premiums paid to a private pension plan — Citizens — Guichet.lu - Administrative Guide - Luxembourg (public.lu)

Eric can simulate his personal situation in the S-Net Store, under “S-Pension”, and is soon convinced that a supplementary pension plan is a double win, allowing him not only to build a pension pot for his retirement but also to benefit from significant tax advantages straight away.

Decision made!

With all the arguments in hand and the simulation complete, Eric is certain that he has made the right choice. He takes out an “S-Pension” supplementary pension directly via the Store on his S-Net Mobile, all without leaving the house!

You can simulate, subscribe and check your S-Pension scheme directly in S-Net and S-Net Mobile.

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