My pension plan goes down sometimes, what should I do?

Surely, on some occasion, you have been startled when looking at the balance of your pension plan. It is normal, it is not pleasant to see that the investment that you hope will make things easier for you after retirement has fallen. But it is important to stay calm. Don’t be overly alarmed, the economy is cyclical, it rises and falls; markets fall, but sooner or later they rise.

As with any investment formula, pension plans must be studied and understood very well; especially well in this case, as it is a long-term product and they play an essential role in planning our retreat. By now, you probably know what they are, but a brief review of their main characteristics never hurts.

Why is a pension plan an interesting investment?

In the last decade, the Social Security Reserve Fund has gone into decline; reducing from 66,000 million euros to just 5,000, and has been used to pay pensions 50% more. It is logical, because more and more people are living; there are more retirees than active workers and the average pension of these workers exceeds the average wage.

Therefore, if the future does not look too good for public pensions; it would be advisable to save every year, so that when retirement arrives we will have another complementary source of income. And it is useless just saving money, because inflation is taking power away from those savings. To solve this problem, pension plans have the power of compound interest; with it the interest that the plan generates is multiplied.

As pension plans can only be recovered for a series of causes such as retirement, death, disability; or after ten years have elapsed (starting with contributions that have been in place for 10 years in January 2025), choosing a pension plan well is essential.

The legal maximum that we can contribute to a pension plan per year

Even if it is a long-term investment, that does not mean that it is not we have to monitor the evolution of the plan from time to time (there is no need to look at it daily; as short-term ups and downs are not representative), check that we are paying adequate commissions (if not, they will eat the profitability little by little) and rebalance every few years the part we invest in fixed and variable income (adapting the investment to the personal circumstances of each moment).

The legal maximum that we can contribute to a pension plan is 8,000 euros per year (or 30% of income from work or economic activities); this being another figure that cannot be lost sight of; since it limits the reduction of the tax base in personal income tax.

Thanks to pension plans, we pay less taxes for the income we receive during work; delaying your payment until retirement in which; if we have planned well the way to collect the plan (periodically, in capital, a little of both) and assuming that we will have a predictably lower income, the tax bases of the tax will be lower.

What can I do if my pension plan drops?

First, take a deep breath and take it easy. Any investment goes through moments of rise and fall, it is inevitable.

As it has been perfectly clear, pension plans are designed to invest in the long term; they are like that by nature. There is no use worrying about temporary peaks in which the invested assets decrease. You do not have to act hot and get carried away by the first impression; because it could translate into a poor decision. Instead of that, Act with a cool head and consider investing in pension plans in the following way:

  • Make regular contributions. They are important to diversify over time, to compensate for possible decreases with rises and, although we do not enter the best moment; thus we avoid, in any case, investing everything at the worst moment.
  • Do not get carried away by emotion of the moment: It is useless to transfer a plan in times of decline, without calculating how much this recent loss of value represents with respect to the accumulated benefit since you opened the plan.
  • Don’t come upstairs either contributing more than is convenient: only the money that is not necessary in the medium-long term (without exceeding the annual legal limits).
  • Don’t rush over the last peak; Instead, look at your plan’s profitability parameters: TWR (time-weighted) and MWR (quantity-weighted).
  • And if you compare it to another plan, always look at the long-term evolution, of the last few years. It is not representative how it has behaved in the last month or semester.
  • There is no point in radically changing a strategy long-term investment. Instead, it should be modulated as time passes; balancing the risk according to the evolution of the markets and, mainly, according to the age range and time remaining until retirement (closer, more fixed income).
  • If, however, you decide that it is time to transfer your pension plan; go ahead, but don’t forget to contrast the commissions (management and custody) and the expenses of the different alternatives.


Not all pension plans are the same and have different levels of risk based on different factors. The risk level of each of the plans is detailed in the Key Participant Data Document of the corresponding plan. The collection of the benefit or the exercise of the right to redemption is only possible in the event of the occurrence of any of the contingencies or exceptional cases of liquidity regulated in the regulations on pension plans and funds.

The value of mobilization rights, benefits and exceptional liquidity cases depend on the value of the pension fund’s assets and may cause significant losses.

Before making any contract, it is advisable to inform yourself legally, regulatory and fiscally about the consequences of an investment.

The decisions that each investor adopts, both regarding investment and the level of delegation and advice, are their responsibility.

Past returns do not guarantee future returns.

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