You can be both a grasshopper and an ant
“The grasshopper, having spent all summer singing, found herself destitute when the cold of winter came ... she went to her neighbour, the ant's house, to complain of her hunger and begged her to lend her some grain to survive until the new season. “I'll pay”, she said, “what ye invest. Both principal and interest, Honour of insects – and that's tender.”
The ant, however, is no lender; especially since she has spent all summer making provisions to prepare for the winter... This fable is often perceived as an allegory of saving: save now for our "old" days. Note, however, that it contains no morality. The ant is certainly a model of organisation and foresight, but she is nonetheless selfish. Marked by generosity, the grasshopper distributes her art to all, but cannot survive...
Why choose between one animal or the other? This is how we are challenged by AXA's latest campaign on retirement savings: you can be both a grasshopper and an ant! Explanations.
At the beginning of the year, remember: the Luxembourg government introduced a tax reform which led to many changes in retirement provision.
Established nearly 30 years ago, this provision has evolved over time. Today, you can choose the way you access your savings at the end of your policy: an annuity, capital, or even a mixture of both. Finally, another advantage: a deductible ceiling set at 3200 euros.
Culturally it is a great change for Luxembourg.
Save more by benefiting from a substantial tax reduction: a good way for the government to revive interest in retirement pensions, provided you have effective products!
Faced with this reform, AXA has therefore created an innovative solution called the "Save for Life Pension" that combines the security of a capital-protected fund with the dynamism of the financial markets. This is a turnkey solution - it adapts to the saver's investment horizon with a proportion of sliding risk. In other words, the younger you are, the more active your dynamic assets (i.e. equities, real estate…) will be. On the contrary, the closer you get to retirement, the more dynamic assets give way to secure assets (i.e. cash, bonds…)
Culturally it is a great change for Luxembourg. Previously, historical products asserted a total and permanent guarantee on capital, which condemned insurers to invest in bonds (mainly government ones) which now offer returns close to zero.