IKZE is an abbreviation of the Individual Retirement Security Account, which is an element of the third pillar of the pension insurance system in Poland. It is a tool for saving for private retirement, which is characterized by tax benefits. Is it different from IKE and who can create it?
IKZE – how does the retirement pension method work?
The founding of IKZE begins with the selection of an institution authorized to run it. The most profitable, but also not carrying a big risk are voluntary pension funds and investment funds, to which NN Investment Partners (formerly ING Investment Management) recommended in many rankings, the offer of which is available at https: // www. nntfi.pl/emerytura/ikze . The account is credited with funds that can not exceed 1.2 times the average salary per year – this amount is given to public information every year. Cumulative and multiplied money can be withdrawn after the age of 65 (then only 10% tax will be charged), and in the case of early withdrawal, you must take into account the obligation to pay Belka tax, amounting to 19%. However, if you want to change only the service provider, we can do it without a problem, and if it happens after 12 months from signing the contract, the process will be free.
Who can set up an Individual Pension Security Account?
An account can be opened by anyone who lives in Poland and here settles income tax on natural persons. The age limit is 16 years of age, and persons to be of age must have a fixed income documented by a contract of employment. The Individual Pension Security Account can be held in parallel with IKE (that is, the Individual Pension Account , more on this later in the text).
Beam tax and income tax – IKZE tax benefits
The Individual Pension Security Account is endowed with two tax benefits. First, the profits obtained in this way are not subject to capital gains tax, i.e. the so-called Belka tax, which is 19%. We will only pay it if we decide to pay before the age of 65. You can look at this as a guarantee of retaining savings up to the retirement age. Secondly, the sum of money paid into IKZE can be deducted from personal income tax, which means that you can get a refund from the Tax Office.
Difference between IKE and IKZE
There are several differences between IKE and IKZE. The first concerns the age censure valid for the payment of funds without the Belka’s tax burden. In the case of IKZE, as already mentioned, it is 65 years old. However, an IKE owner can do it already at the age of 60, or even 50 years (with almost a faster retirement). Another difference concerns tax breaks. In the case of an Individual Pension Account, we can not deduct the paid income tax money. However, there is no charge of 10% tax on the disbursement of funds after reaching retirement age. It is possible to have both accounts, but in practice it is best to analyze the possible profits and invest in one of the options.