You may set up an annuity pension up to 15 years after you have reached your early retirement age. It can be set up by you or by your employer.
Annuity pension – contribution
Up to DKK 50,000 may be contributed to an annuity pension scheme, irrespective of whether the contributions are made by you or by your employer. The DKK 50,000 limit comprises all annuity pension and terminable annuity schemes to which you make contributions.
You may choose to make regular pension contributions – e.g. every month – or contribute a lump sum.
Annuity pension – disbursement
An annuity pension scheme is disbursed in instalments over a number of years, ensuring you an income, for example every month. Your savings may therefore to some extent replace your salary income, and provide you with financial protection when you are no longer working.
Annuity pensions may be disbursed as fixed monthly amounts for 10 to 25 years – depending on when the disbursements start. Disbursements may start when you reach your early retirement age at the earliest and must stop no later than 25 years after this date.
Tax
If you pay top-bracket tax, you will often benefit from contributing to an annuity pension, as your contributions are deductible from your income, including your income subject to top-bracket tax. When you retire, you must pay tax on the disbursements.
If payments are made in the period 2011-2019, they can sometimes be covered by the so-called compensatory tax - but only if the total pension payments exceeds 362,800 annually.
The annuity pension may be offset against any social security benefits.
Financial protection for you and your family
You may link personal insurance policies to an annuity pension to ensure that you and your family are protected during the savings period, for example, in the event of your death or should you become unable to work.
Get advice
The amount you contribute should always match your life and your financial situation to ensure that you have best possible savings solution. Book a meeting with one of our advisers, who will assess your situation, and give you an overview of when to set up an annuity pension and the amount you may contribute each year.