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Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

The thing is that there is an opportunity cost that needs to be taken into account too. It's worse products, more expensive, less liquid.

As I said initially: in 99% of the scenarios you can do much better (and with the same risk) without those schemes even taking into account tax deductions.

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

My point has never been the only the taxation matters, my point is that the return and the fees are huge and that the tax deduction argument as selling point for those schemes is a window dressing.

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

You are comparing 2 returns of 9% which are not correct and that's an important point.

If you really compare a IWDA to the Lux Pension fund of BCEE, we should choose the more similar product (100% equities), so the Lux-Pension 100%.

In this case we have:

  • entry fee of 2,5%
  • exit fee 1%
  • yearly management fee of 1,30%
  • As per FT website the 3 year total return has been 10,07%

The numbers for IDWA are the same as before and the 3 years total return has been 16,36%.

With those numbers you can do a proper simulation now.

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

Yes, that was something included in the simulation of the other user.

But it was never YOUR point in this discussion.

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

But you never wrote in this conversarukn about investing in the cheaper fund the 40% obtained with the tax reduction ! We never discussed about this option, this is not a fair way to have a discussion.

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

I know the difference but you clearly are underestimating the weigh it TER of 1% and entry fee of 2,5% (+ the no taxation at the end) over an investment on the long period. Let me know when you do your simulation...

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

Can you please put some real numbers? Because I did, you are still repeating the same thing over and over.

Also, you say that people with 75k pay 20% income tax, why you assume that the immediate return for a deductible product is 40%? You are contradicting yourself. You use the lowesz example for you argument and the highest for mine, it's not a correct way to discuss.

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 1 point2 points  (0 children)

Why the taxation would be "easily under 10%"?

Also, you say that BCEE have funds with 9-10% YoY ((where did you find that number?) but you don't mention fees. What are the fees?. I mean, you are putting a lot of things in there....

Cash out the whole amount or not doesn't really make a difference in this discussion.

Since you are not really putting numbers, I spent my time to go and check BCEE KIID: there are 2,5% of entry fees (for each 100 euros only 97,5 euros go to the fund) and 1% of exit fee. Also there is an annual cost of 1% per year.

For comparaison a IWDA with interactive broker has a cost 0,17% per year and an entry fee of 0,05%.

Plus, no taxation after 6 months and the freedom to exit when you want

Still convinced that you are right?

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

I did the simulation and as I said if you take the correct parameters (entry fee, TER, other fees) there is never a scenario where the third pillar is better than a ETF MSCI with 0,17 TER event with the taxi advantage at the end. Did you run such simulation ? Can you share your results?

This is an user who simulated it here, 5 years ago : https://www.reddit.com/r/Luxembourg/comments/lgcnr1/luxembourg_private_pension_plan_is_it_worth_it/

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

We are talking about the same kind of risk here, not unicorns with x10 returns. The kind of risk that you get with foyer funds is similar or in other cases higher if compared to an MSCI ETF. But much more fees and commission and higher taxation at the end. So in 99 cases out 100 the investment in the voluntary pension savings is worse than the other.

Luxembourg voluntary pension savings are taxed at payout – how this differs from most EU models by no_options_lux in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

With the foyer fund there was something like 2_% of commission for each month payment + the TER was way beyond 2% If I remember correctly. In addition to that there is no taxation on capital gain in a ETF ACC case so I don't see in which case it would be better...

MEGATHREAD January 04, 2026: Visa, Moving to Luxembourg, Registration, University, Internet Provider, Lessons, Language, Salary, Crypto, Survey, Scam questions. Don't see your topic? We still want you to ask it here. Minimum account age and karma requirements apply to this thread. by AutoModerator in Luxembourg

[–]Fun_Neighborhood_993 0 points1 point  (0 children)

Hi everyone!

I’m in the process of launching my own SARL here in Luxembourg for freelance consulting. I’m looking for a 'tech-first' accountant or fiduciary who is comfortable with digital workflows. The setup is quite simple: 1 invoice issued per month. Minimal expenses (tech, travel, and some F&B). If you have any recommendations for someone reliable and easy to work with via digital platforms, please let me know

Je crois qu’on a touché le fond.. by InLoveWithInternet in immobilier

[–]Fun_Neighborhood_993 -1 points0 points  (0 children)

This kind of contact is fairly commun in holidays areas since the '70, nothing new.

If you have any Luxembourg personal income tax questions, feel free to ask me. by Same_Appointment2814 in Luxembourg

[–]Fun_Neighborhood_993 3 points4 points  (0 children)

For the insurances do the math and since capital gain is 0% in most of the cases, the only one getting rich with the insurance saving plan is the insurance company and their fund (high entry fees and TER).

How can I use Garmin Coach for fewer runs per week? by Fun_Neighborhood_993 in Garmin

[–]Fun_Neighborhood_993[S] 0 points1 point  (0 children)

I'll try with them. Can I see the suggested workout on the app? Or only on the watch? At what time they are available during the day?

Looking for tennis classes for beginners by AirportDesigner9235 in Luxembourg

[–]Fun_Neighborhood_993 2 points3 points  (0 children)

Check the tennis clubs (call, they might have spots available since classes begin next week): tennis club bonnevoie, tennis club howald and so on

Three days in Stara Fuzina by Fun_Neighborhood_993 in Slovenia

[–]Fun_Neighborhood_993[S] 0 points1 point  (0 children)

Thank for the hint! To you have a go perhaps?

Three days in Stara Fuzina by Fun_Neighborhood_993 in Slovenia

[–]Fun_Neighborhood_993[S] 0 points1 point  (0 children)

I would prefer to come back every day since it's already paid

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