+420 776 654 929
+420 273 136 452
jitka.podliskova@bcas.cz
BROKER POINT PREMIUM WALTROVKA
Walterovo náměstí 329/3
158 00 Praha 5
BROKER POINT PREMIUM PRAHA KARLÍN
Rohanské nábřeží 670/19
186 00 Praha 8
Long-Term Investment Product
(LTIP)
What is LTIP?
The Long-Term Investment Product (LTIP) is a state-supported financial instrument that, since 1 January 2024, has offered the opportunity to invest for an annuity in a meaningful, tax-efficient way. It is designed to help you gradually build financial independence and a long-term reserve that you can use to improve your life in retirement.
Prepare for a contented old age
Want to maintain your standard of living and standards in retirement? To be financially independent? Then preparing for your retirement is absolutely crucial and I recommend you take it into your own hands. The sooner the better.
Our population is ageing. In the long term, the number of people in active employment is declining and the number of those of retirement age is increasing. As the age mix of the population changes, the state will have to gradually move the retirement age. It is also unlikely to raise pensions at a rate in line with inflation.
The situation with pensions in the Czech Republic
The Czech Republic, the number of people in active employment has long been declining and the number of retirees is increasing.
LTIP tax benefits: annual rebate of up to CZK 7,200
There are many more reasons to take out an LTIP:
Tax benefits
You can deduct up to CZK 48,000 of your own invested funds from your tax base (the same limit applies for all supplementary pension products). The annual tax rebate can be up to CZK 7,200.
Employer contributions
Employer contributions can also be used for LTIP investments (employer tax deduction for contributions up to CZK 50,000).
Wide range
of investment products
with different risks
With LTIP mode, you can invest in equity funds, ETFs, bond funds and other financial instruments.
Flexibility and option to change
You can increase, decrease or suspend payments as needed.
Long-term investing
with returns as suitable preparation for an annuity
Long-term investing generates attractive returns.
What might that look like?
Model example with CZK 1,500 per month set aside and an employer contribution of CZK 3,000 per month
Frequently asked questions and answers
The basic list of financial instruments you can invest in under an LTIP is determined by law. These are primarily mutual funds, bonds, stocks, ETFs, term deposits, savings accounts and other financial instruments. For example, the law prohibits investing in securities that are not traded on the regulated markets (i.e. it seeks to exclude uncertain investments). Only regulated entities can provide LTIP.
Money can be withdrawn from the LTIP at any time. However, if you do this before you turn 60 and before 10 years have passed since the LTIP was set up, you will have to pay back what you have deducted from your taxes.
Employees and self-employed people can deduct up to CZK 48,000 of their LTIP contributions from their tax base per year. With an investment of CZK 4,000 a month, you’ll save a total of CZK 7,200 per year in tax. The limit of CZK 48,000 applies to all retirement security products combined.
Yes, there is no limit to the number of accounts a client can have.
The LTIP can also be combined with other forms of retirement savings, such as supplementary pension savings.
Unfortunately not. Regrettably, you cannot convert supplementary pension savings to a long-term investment product. The only way is to terminate the supplementary pension savings contract (in which case you have to take into account possible penalties if you do not meet the conditions for withdrawal) and then deposit the money you receive into the LTIP.
An LTIP with reinvestment means that what the state gives you back in taxes, you invest back into the LTIP. The tax rebate then also earns money over time, significantly increasing the final amount. What might that look like?
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Contact form
Considering taking out an LTIP? Got any questions or want to make an appointment with me? Contact me via the form and we’ll go over everything together.
