Building your savings while benefiting from tax advantages: key solutions to consider

In Luxembourg, planning your financial future is essential, whether you are an employee, a self-employed professional or a young worker. With the evolution of the pension system, longer life expectancy and the desire to maintain one’s standard of living in retirement, long-term saving has become indispensable. In this context, many residents are looking to achieve two goals: building solid savings for the future and reducing their taxable base thanks to Luxembourg’s favourable tax measures.

The savings solutions offered by Foyer, such as horizon and horizont pro, address these needs directly. They fall under the third pillar of the Luxembourg pension system and provide a favourable legal framework for optimising taxation while investing efficiently for the future.

Preparing for retirement in Luxembourg: a growing priority

Understanding the Luxembourg system

The national pension system is based on three complementary pillars:

• 1st pillar: the statutory pension, financed through social security contributions.

• 2nd pillar: the employer-sponsored supplementary pension scheme, optional and offered by certain companies.

• 3rd pillar: individual savings, encouraged by tax advantages.

Although the statutory pension in Luxembourg is often more generous than in many neighbouring countries, it does not always cover the full income previously earned. Depending on the individual, the gap can be significant.This is why the third pillar plays a key role in ensuring a comfortable retirement.

Tax advantages for savings in Luxembourg

The framework defined by article 111bis LIR

The Luxembourg state actively encourages residents to save through a pension insurance contract. Premiums paid are tax-deductible up to €3,200 per year and per taxpayer.

This measure applies to a wide audience: employees, cross-border workers affiliated in Luxembourg, self-employed professionals, liberal professions, and more.

An even more advantageous tax tool for the self-employed

Following changes to the legal framework, self-employed and liberal professionals can also subscribe to a supplementary pension scheme similar to the second pillar. A key advantage stands out: retirement savings premiums are deductible up to 20% of annual net taxable income.

This measure enables significant tax optimisation while building a supplementary pension and protecting one’s family through associated coverage.

Savings solutions offering flexibility, performance and protection

horizon: the retirement savings plan for individuals

The horizon contract allows savers to build long-term capital while benefiting from a favourable tax framework. It is aimed mainly at employees and private individuals who wish to smoothly complement their future pension.

Its main advantages include:

• Regular and flexible contributions, with different payout options at retirement (lump sum, partial withdrawals, annuity).

• Professional asset management by CapitalatWork, aiming to optimise return and risk control.

• A wide selection of investment profiles, from defensive to dynamic, including ESG-focused funds.

• Automatic protection: in the event of death before retirement, the accumulated savings are paid to the designated beneficiaries.

• Tax deductibility under article 111bis, up to €3,200 per year.

This contract is designed to support long-term wealth building within a simple and adaptable framework.

horizont pro: the dedicated solution for the self-employed

For self-employed workers, liberal professions and small businesses, horizont pro is particularly well-suited to the Luxembourg market.

It offers:

• Retirement savings with enhanced tax optimisation, deductible up to 20% of net taxable income.

• Flexible contributions, with the ability to adjust or add extra payments depending on income fluctuations.

• Investment strategies aligned with the subscriber’s risk profile.

• An integrated life insurance component, offering base or optional coverage to protect loved ones.

This product meets the specific needs of the self-employed, who often lack the supplementary pension benefits available to employees.

How a savings solution can meet your needs

Building a secure and flexible income supplement

Whether employed or self-employed, horizon and horizont pro allow you to:

• spread out your saving effort over time,

• invest according to your goals (safety, performance, sustainability),

• build capital available from age 60,

• enjoy full flexibility at payout.

  
  

Long-term tax optimisation

Tax-deductible premiums reduce taxable income immediately, offsetting a substantial part of the financial effort. For a self-employed person deducting up to 20% of net income, the tax impact can be especially advantageous.

Combining savings and family protection

Both solutions integrate a protection component, allowing you to combine:

• Retirement preparation,

• Financial security for dependants in case of death,

• Adaptable guarantees based on personal circumstances.

For example, horizont pro includes coverage equal to or higher than the accumulated savings, ensuring additional protection.

Practical tools to manage your savings

Through the myfoyer.lu online client space, policyholders can:

• Access their contracts,

• Track investment performance,

• Download tax certificates,

• Contact their agent via secure messaging.

This digital platform simplifies the monitoring of long-term savings and helps adjust strategy over time.

Conclusion

Preparing for retirement and optimising taxation are fully compatible goals in Luxembourg thanks to dedicated savings solutions.Whether you are an employee or self-employed, horizon and horizont pro help you plan your future within a favourable tax framework, while offering flexibility, performance and protection.

For personalised guidance and a strategy tailored to your situation, discussing your options with a qualified adviser is recommended.