Luminor: Common Mistakes When Building a Pension Savings Pot
Atis Krūmiņš, head of pension and asset management at the bank Luminor, points to common mistakes people make when saving for retirement. He urges people to review their plan regularly and not delay starting.
Residents of Latvia often build their pension savings passively and begin thinking about them late, says Atis Krūmiņš, head of the pension and asset management division at the bank Luminor. In his view, this can reduce the amount available in the future. The commentary was published on 25 October 2026 and concerns the 2nd pension pillar (the mandatory funded part, financed from wages) and the 3rd pillar (voluntary additional savings).
Review the plan
One of the most common mistakes is assuming that everything is done once a person starts working officially and joins the 2nd pillar. It is important to know which plan the money is saved in, how it is invested, and whether it suits the person's age, goals and willingness to take risk. If a plan is not reviewed for several years, it may become unsuitable. Luminor's observations show that young people and those close to retirement age most often invest in plans that do not match their age.
Too much caution when young
Another widespread mistake is choosing an overly cautious strategy at a young age. With a long time until retirement, there is more room to ride out short-term swings in financial markets. Younger people may therefore often be better suited to more active plans that put a larger share of funds into equities. These can fluctuate more in the short term but may let savings grow faster over a longer period. More conservative plans are usually better for people with less time left until retirement.
As an example, Luminor cites an active plan in which someone starts at age 28 and invests 75 euros a month. By age 65 they could accumulate 114,541 euros, compared with 59,557 euros in a more conservative plan.
No need to wait for the “right moment”
Many people see additional savings as relevant only in middle age or shortly before retirement. It is more effective, Luminor says, to start early with small, regular contributions. In the 3rd pillar, individuals choose the size and frequency of their contributions. Luminor data show the average contribution among its clients in this pillar is about 55 euros a month. Contributions may also qualify for a refund of personal income tax.
