There is still a safe investment and a good place for our money. There’s even a brokerage scandal out of the tap now, but don’t be fooled, especially when it comes to making a living in old age!
We definitely need to set aside for retirement, and obviously security is paramount here, which is why here are 5 facts that guarantee that your money is safe when you choose to retire:
Pension insurance is not private property!
Of course, the current brokerage scandal does not change the fact that state pensions will be low. We can make sure of this by calculating it for yourself with the pension calculator. The question is, why choose pension insurance right nowadays?
The first answer to this is that pension insurance has all the legal benefits of life insurance. Here we can think of an interest tax and EHO discount, meaning that 22% or 11% of our profits need not be given to the state. However, the real legal advantage is that through life insurance (pension insurance), we contract for a future service, which is thus a legally separate category, such as a bank account. Therefore, the assets collected here cannot be sued or enforced. This means that neither the state nor anyone has access to the money, even legally, due to strict legal rules.
Money is always in securities
As we are dealing with strict legal regulations, it should be noted that the brokerage scandal (also) arose because people’s money was not invested in securities but recorded in cash. Because of Forex trading. This is a foreign exchange trading where the rise / fall in the exchange rate of each currency gives you profit or loss. A very unexpected event (the removal of the CHF exchange rate barrier) caused a loss that was unsecured.
With insurance, this risk does not threaten us, as money flows into securities (specifically asset funds). In addition, it is important to know that securities are for our name. Thus, in the event of an impossible event, the insurer will cease to exist, and we will retain our securities, which we may transfer to another financial institution without loss.
We are talking about big international companies
Why is it impossible for an insurance company to go bankrupt? First, because the insurers are big companies. The big one has to be understood that the capital of these companies usually ranges from $ 2,000 to 6,000 billion. This may already be a guarantee that our several million forints will be covered.
Secondly, we are talking about international financial institutions that have a history of over 100 years. Almost all domestic insurers are subsidiaries of an international group of companies. This is a kind of risk reduction because if things go wrong in a city or region, it is balanced by the other subsidiaries of the parent company.
According to the data of 2013 (annualized insurance data for 2014 are expected in 2 months), all insurers in Hungary paid out more than $ 183 billion to the population for property damage, and before that $ 172 billion. They pay such high amounts to our clients every year, and in addition to that, we have to pay $ 20-30 million. In addition, insurers are much more closely connected than other segments of the money market.
The power of reinsurance
One of the most interesting and decisive facts about the stability of insurance companies is the concept of reinsurance. The point of this is that when we enter into a contract with insurer A, he will in the background agree with insurer B (depending on volume, even insurer C) on each type of contract whether or not he undertakes the contract. conditions, risks. That is why there is always a risk assessment, because when we sign the contract, it is only an offer when the bond arrives, it is considered a contract. All in all, this means that more than one insurance company undertakes to reimburse you under the terms specified.
There is only higher risk if we want to
The portfolios of insurers and the fund managers behind them, the institutional investors, did not include Quaestor bonds. These investors did not find them safe enough, even with high promised yields, so they found it too risky for themselves and their clients’ money.
Currently, bank interest rates are low, which makes it worth looking for another form of investment and savings. Pension insurance is an excellent option for this, as it is here that we decide on the risk portfolio we choose, so that we minimize the risk of loss (government securities, money market funds). However, retirement insurance is also a very good way of generating good profits at normal risk.
The safest retirement savings is pension insurance
By reading through these 5 points, we can say that we can actually make the safest investments today through savings life insurance and retirement insurance. They are extremely stable at institutional level as well as in volume, and insurers cannot go bankrupt, fuse, buy, or go bankrupt. Unfortunately, the Quaestor company mentioned above also had NYESZ accounts, which do not yet know exactly what their fate will be and how they will refund the money they have collected there. This cannot happen with a pension insurance. Since we need to save for retirement, it is worth putting it in a place where you have maximum security. We recommend using pension insurance calculators to help you adjust your offerings.