What is a pension?
Pensions may seem complicated, but they are simply a long term savings account that helps you save for your retirement. Pension plans allow you to make regular payments and transfer one off lump sums into this account. The money in this account is invested and grows tax free.
Why is it important to take out a pension?
The State Pension (Contributory) is Ireland is currently €253.30 per week; less than the minimum wage. Most people would find it difficult to maintain their standard of living if they have to rely on the ‘old age’ pension alone. Starting a pension will allow you to supplement the State Pension and provide a more comfortable and enjoyable retirement.
On average, we are living much longer than our parents and grandparents. With the improvement in medical care, we can expect to live for 20 or more years after we retire. A pension can help you make the most of these years and provide the money needed to enjoy travel, golf, time with the grandchildren or whatever floats your boat. What kind of retirement would you like?
When should I start a pension?
The earlier you start a pension, the more time it has to grow and the more money you’ll have at retirement. The longer you leave it, the more money you’ll have to save every month to reach your retirement goals. Make it easier on yourself by starting a pension without delay.
What about Tax Relief?
Unlike a normal bank savings account, money invested in your pension gets generous tax benefits. You’ll benefit from tax relief when you put money into the pension (if you earn money at the higher rate of tax, the tax man will contribute €40 for each €60 you invest in your pension). The money in your pension grows tax free. And you can take out a big tax free lump sum when you retire too.
How much will my pension be worth?
This will depend on how early you start, how much you contribute, the type of pension you choose and the investment return from the pension. What is clear is that the sooner you start the better. It is important to decide on how much money you want in retirement and to review your progress every year with your pensions advisor to make sure you are on track. That way, you can tweak your plan along the way to make sure you reach your goals.
How much should I save in my pension every month?
The amount you contribute will depend on your own circumstances. It is important to work out what you can afford to contribute. However, don’t worry, with most pensions you can change your monthly contributions if you need to. The key things you need to take into account is how long you have to save until your retirement and what income you would like when you retire. Our Pensions Advisors can work out the figures with you and help you get your pension sorted.
How do I get started?
- Have a chat with an Irish Pensions advisor – call (01)8570655, fill in the form below to arrange a call, or start a conversation using our Online Chat (click the icon on the bottom right of the screen).
- The advisor will ask you some simple questions to identify what you need and how your money should be invested.
- They will compare pension providers and fund managers to find the most suitable pension for you.