Financial wellbeing is an essential part of one’s overall wellness, yet it tends to be overlooked or postponed in the hustle of everyday life. In essence, financial wellbeing refers to understanding one’s financial situation and needs, where individuals can confidently manage day to day expenses, cope with unexpected expenses, as well as save for future goals and life stages. Financial wellbeing may be achieved through financial planning, which will enable individuals to assess their financial situation and objectives, and take deliberate steps to safeguard their financial future.
Financial planning is the process of assessing resources, setting goals as well as looking for a way how to achieve those goals. This includes saving for both short term and long term goals, which will take into consideration specific life stages, such as buying your first home, raising a family as well as retirement planning.
We will take a moment to focus on retirement planning which is one of the most critical aspects of financial planning. In today’s reality where life expectancy is increasing, and inflation erodes the value and relevance of the state pension, individuals are responsible for ensuring they have enough resources to support themselves during retirement. Retirement planning involves assessing how much income will be required in retirement, and identifying how to accumulate the desired funds to generate this income.
The advantages of planning for retirement include having sufficient funds to maintain one’s lifestyle after retiring from work, hence reducing the likelihood of depending on others, thus maintaining financial independence. This surely provides an element of peace of mind.
Bank of Valletta p.l.c. believes in the power that planning for retirement gives every one of us, and aims to increase individual awareness on this matter, by providing information and possibly guidance to its customers. Apart from the array of investment solutions offered by the Bank, a more targeted retirement planning solution is offered through the two variations of the Personal Pension Plans which is offered by Mapfre MSV Life and distributed by the Bank.
The first option is the Mapfre MSV Life Unit Linked Personal Pension Plan. This plan offers various funds which can be linked to the Pension Plan spanning from conservative funds to lifestyle funds such as the Fidelity Target Funds and growth-oriented equity funds. This is a unique proposition which offers a highly diversified solution to retirement savings and can therefore minimise the impact of inflation. This choice is instrumental in tailoring the plan in line with one’s changing needs and objectives.
The second option is the Mapfre MSV Life With-Profits Personal Pension Plan which is adequate for those wishing to take a more conservative approach for their retirement savings. This plan invests in a diversified portfolio of assets which aims to even out returns over the years, while providing investors with some protection from the volatility of the underlying investments.
It is important to regularly review these investments and adjust contributions to ensure that they align with retirement goals.
Individuals can start planning for retirement from as little as €40 per month. The earlier one starts such plans, the better to get the advantage of the power of compounding. This is when returns on investments generate their own returns over time. Thus, early and consistent contributions can result in significant retirement savings. Besides achieving peace of mind, when contributing to a Personal Pension Plan, a 25% tax credit can be achieved on annual contributions. The maximum possible tax credit currently stands at €750 per annum. An additional incentive is currently available whereby anyone starting a Unit Linked Personal Pension Plan by the end of December 2024, will get an additional one-time top up of €175. Terms and conditions apply.
Financial wellbeing is not achieved overnight but through deliberate and thoughtful planning. Financial planning serves as the foundation for one’s financial future, helping individuals navigate life’s challenges and achieve their goals. One key component of this planning is preparing for retirement, to ensure individuals can enjoy a comfortable and financially sound retirement. By taking control of their finances now, individuals can set themselves up for long-term financial health and peace of mind.
Bank of Valletta p.l.c. is committed to promote a holistic approach to well-being. With this in mind, we partnered with Colour My Run and launched out first-ever Well-being Challenge. This collaboration aims to tangibly invite the public to take the plunge and invest time in Physical, Mental and Financial Wellness.
To bring all aspects together, the Colour My Run initiative serves the purpose of getting physically active by running, walking or even dancing along a five-kilometre route, creating awareness on mental well-being, since part of the proceeds from this event went in aid to the Richmond Foundation, whilst Bank of Valletta p.l.c. took the opportunity to promote and continue raising awareness on pension adequacy highlighting the importance of financial planning, particularly for retirement purposes.
Issued by Bank of Valletta p.l.c., 58, Triq San Żakkarija, Il-Belt Valletta VLT 1130. Bank of Valletta p.l.c. is a public limited company regulated by the MFSA and is licensed to carry out the business of investment in terms of the Investment Services Act (Cap. 370 of the Laws of Malta).
Bank of Valletta p.l.c. is an enrolled Tied Insurance Intermediary under the Insurance Distribution Act, Cap. 487 of the Laws of Malta for MAPFRE MSV Life p.l.c. (MMSV). MMSV (C-15722) is authorised under the Insurance Business Act, Cap. 403 of the Laws of Malta. Both entities are regulated by the Malta Financial Services Authority.
The €175 top up is a limited time offer ending 31st December 2024. MAPFRE MSV Life reserves the right to close this offer earlier.
The Products are manufactured by MAPFRE MSV Life p.l.c. and distributed by Bank of Valletta p.l.c.
Further information on the plans may be obtained from the Key Features Document available from our website www.bov.com. If you stop paying your plan before the chosen retirement date, you may not get back as much as you invested as plan charges will continue to apply. If you invest in this product, you will not have access to your money before the retirement date. The value of your investment may go down as well as up. Changes in the rate of exchange of currencies may also effect the value of investments. Tax treatment depends on individual circumstances. Tax legislation and the amount of rebate may change in the future.
Claire Falzon is a Senior Manager on Insurance Services and Pensions at Bank of Valletta.