Pensions
Many people have plans for when they retire. They are not tied to working 9-5, all the children may have grown up and they want to make use of their free time.
It is important to plan for you retirement. With people living longer and with an ageing population this will put more stress on the State Pension.
The Average Retirement Age in Ireland for State Pension purposes is in the process of increasing to:
Age 66 in 2014
Age 67 in 2021
Age 68 in 2028
Most people dream of retiring earlier but by not setting up a Pension you could you be in fact be retiring later than you had planed!
Can you rely on the State Pension to provide you with a comfortable lifestyle that you have come accustomed too, never mind financing those dreams you have for your retirement?
The State funds State Pensions from taxes taken today. The more people there are working the more money the State has to Fund Pension expenditure. In other words the Government takes tax from current employees to pay Pensions to existing Pensioners.
However due to the ageing population, there will be less working people in the future to pay into this pot, and more pensioners to be paid out of this pot:
In 2010 there was 6 People at working age for every 1 Pensioner
In 2030 there is estimated to be 3 People at working age for every 1 Pensioner
In 2050 there is estimated to be 2 People at working age for every 1 Pensioner
(Source: National Pensions Framework, 2010).
Pensions can be confusing to most people. With so many providers, products and changing legislation it can be hard to keep up.
| Moneymatters.ie can advise you on all your Pension needs: | |
| We can advise you what State Benefits you are entitled to We can review your existing Pension to see how it is performing and the projected benefits of the Pension We can review the charges and performance of your existing Pension to see if it is providing you with value for money | We can advise you how to best make use of tax incentives to ensure that you are maximising your tax savings We can advise you how to make additional contributions to your Pension on top of your Company Pension Scheme When should you start your Pension? How much should you contribute to your Pension? |
Many people take out Pensions through their bank without fully understanding the charges. This can have a huge effect to your Pension fund over the term of your Pension – resulting in less money for you. Most banks are tied to a single Life Company and therefore they will only offer you Pension Products from one provider. Moneymatters.ie will provide you with Independent Impartial Advice.
The earlier you start making Pension Contributions the better. As you get older you will have to contribute a substantially higher percentage of your Income to achieve the same Pension Fund.
Pensions provide a Tax Efficient way of savings for your retirement. If you pay tax at 41%, the cost of contributing €100 to your Pension is €59. On retirement you can also take a Tax Free Lump Sum from your Pension.
Life is never straightforward! It is important to regularly review your Pension to ensure that it is performing and continuing to meet your needs.
You will need to look at:
- Your Pension Provider – Are they performing in line with other Pension Providers and are the financially secure?
- Your contributions – Do you need to increase your contributions in order to make up any Gap in your Pensions?
- Are you availing of all the tax relief available?
- Do you need to move from riskier portfolios to less likely portfolios?
- Have any of your circumstances changed?
- Would you like to see how much of an income your current fund will provide you with on retirement?