Ivo Zahariev, Chief Financial Officer of PAC Doverie: People should think about their pension early

"Medicine is developing, and statistics are categorical that most people will live to retire. This moment will come sooner or later, and for this reason it is important to think early", said Ivo Zahariev, Chief Financial Officer of PAC Doverie, who was among the speakers at the "Personal Finance" forum organized by Money.bg.

He added that according to national statistics, people benefit from their pension for an average of about 17 years and it is important what their replacement income will be. 

"People often think that they should think about retirement at around 40-45 years old, and they have missed a lot of time. However, there is a way to catch up through the Voluntary Pension Fund (VPF). For comparison - if a person at 40 years old starts contributing 100 BGN per month, at a 4% average annual net return, at 65 years old they will have accumulated about 50,000 BGN in their account. But if they started contributing such an amount at 20 years old, they will have collected an amount of about 145,000 BGN. If the parents of teenagers start contributing 100 BGN to them every month from the age of 16 and then the contributions continue, then at the end of their working life they will have over 170,000 BGN for an additional pension. Of course, the contributions can also increase, and hence the final amounts", explained Zahariev. 

He recalled that insured persons in the VPF can benefit from a tax relief of up to 10% of their annual tax base and do not owe taxes when withdrawing funds when an insurance event occurs. In addition, the funds from personal contributions are available at any time and the persons for inheritance are selected, depending on preferences. 

Ivo Zahariev added that it is high time to introduce, etc. multi-funds, where the money of clients from different age groups will be managed differently, with the goal of achieving higher profitability. According to the calculations of industry experts, the new approach would generate twice as high pensions as the universal pension funds, which provide for all workers born after 1959. 

During the forum, which was also attended by many young people, topical topics related to the world of money, global processes on the real estate market, long-term investments, technological innovations and the chances of success in business were discussed.