You may set up a terminable annuity irrespective of your age. It can be set up by you or by your employer.
Terminable annuity – contribution
Up to DKK 50,000 may be contributed to a terminable annuity scheme, irrespective of whether the contributions are made by you or by your employer. Furthermore, you may make contributions for as long as you like – even after you have stopped working. The DKK 50,000 limit comprises all terminable annuity and annuity schemes to which you make contributions.
You may choose to make regular pension contributions – e.g. every month – or contribute a lump sum.
Terminable annuity – disbursement
A terminable annuity is disbursed in fixed monthly amounts for a certain period from the date when you reach your early retirement age at the earliest. Generally, the disbursement period is at least ten years, but disbursements may be made over a period of your choice, but not for life. Disbursements will cease upon your death, irrespective of whether this is before the full amount has been disbursed.
Your terminable annuity contributions are deductible from your income, including your income subject to top-bracket tax. When you retire, you must pay tax on the disbursements, which are taxed as personal income.
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.
Your annuity disbursements may be offset against any social security benefits.
Financial protection for you and your family
It is important to have the right cover, even while you are still working. It may therefore be a good idea to link personal insurance policies to your life annuity. In addition to protecting your spouse or your children, personal insurance policies may also protect you, for example if you become unable to work.
The amount you contribute should always match your life and your financial situation to ensure that you have the best possible savings solution. Book a meeting with one of our advisers, who will give you an overview of the amount you may contribute each year.