There's a truth that today's thirty-somethings only half know: the state pension will exist, but it will be far lower than they imagine. Under the contribution-based system, the payout depends on how much and for how many years you've paid in — and on careers that are often discontinuous. The result is a replacement rate — the ratio between first pension and final salary — destined to fall well below the levels of previous generations.
Why does starting early matter more than how much you pay in?
A supplementary pension isn't a financial gamble: above all it's a matter of time. Thanks to compound interest — returns that in turn generate further returns — every year gained at the start is worth far more than a year gained at the end.
An example makes it clear. Paying €100 a month with an average return of 4% a year:
- Starting at 30, by 67 you reach around €100,000.
- Starting at 45, with the same contribution you reach about €41,000.
The same monthly effort, but a result more than double. Those who start at 30 pay in €18,000 more (€44,400 against €26,400), but by 67 they have about €59,000 more: the rest comes from the years that money has had to work.
The best time to start was ten years ago. The second-best time is today.
Not just time: the taxman helps too
Those who pay into a pension fund enjoy two concrete benefits:
- Immediate deductibility: contributions, up to €5,300 a year, are subtracted from taxable income. In practice, part of what you pay comes straight back as lower taxes. Our deductibility simulator works out how much comes back in your case.
- Reduced final taxation: the benefit is taxed at a rate starting from 15% that falls to 9% with length of membership — far less than ordinary taxation.
"I'm young, I have time": that's exactly the point
The most common thought at 30 — "I'll think about the pension later" — is exactly the mistake that costs the most. Not because of a lack of discipline, but because you give up the one ingredient that can't be bought at any price: the years. Small, steady amounts are enough; what matters is to begin, even with little.
Where do you start?
The first step isn't choosing the "best" fund, but understanding where you stand: roughly how much your state pension will be, what the gap is, how much you can contribute without straining the present. Our pension simulator gives an estimate of your state pension. From there, the path becomes simple — and surprisingly light. When you get to choosing the instrument, here are the criteria for weighing fund types, risk lines and costs.
