Pensions & Retirement Planning

Helping to secure your future

Do you already have a pension?

The days of working all of our professional lives for one company are long gone.

Many people today will have multiple pensions from various employments. Are you in this category? If so, do you know what pensions you have, what they’re invested in and what you’re being charged? Are they Defined Benefit or Defined Contribution plans ; is the pension scheme fully funded?

It’s worth spending a little time collecting the information from previous employers or pension trustees and gathering it all in one place. We can help you analyse this information.

It may make sense to look at consolidating these pensions into a properly structured retirement plan that you can better understand, where you have more visibility and more control.

Understand the Jargon- What are the benefits/drawbacks of each?

PPP – Personal Pension Plan
PRSA – Personal Retirement Savings Account
BOB – Buy out Bond
EPP – Executive Pension Plan
SSAP – Small Self Administered Pension Scheme

Call us today on 021 4773833 to set up a no-obligation consultation and answer any questions you may have.

Thinking about starting a pension?

The state pension is the largest unfunded liability of any government in the world.

When Bismark introduced the first state pension in 1889, the retirement age was ten years more than people usually lived in Germany at the time, so it wasn’t exactly a burden on the state.

Today it’s a LOT different. We are living longer and the state pension age, now 68 will probably have to increase further, and/or we may see benefits reduced in the future.

It makes a lot of sense to contribute to a private pension to augment what will likely be a meager state pension. In fact the government wants you to save for retirement – The tax breaks are about the only attractive tax benefit remaining post financial crisis.

Tax relief means that a pension contribution of EUR 1,000 costs you just EUR 800 if you pay the lower 20% rate of income tax, and only EUR 600 if you pay the higher 40% rate, plus you are exempt from CGT on investment gains.

Starting a disciplined long-term savings/investment plan at the outset of your career will probably be the best financial decision you will ever make. Slow and steady accumulation and the ‘miracle’ of compounding is the best way to achieve a comfortable retirement, and it’s never too early to start.

It’s also never too late… It’s going to be more difficult to achieve a comfortable retirement, but the tax benefits are generous, and doing nothing is not a sensible strategy.

Call us today on 021 4773833 to set up a no-obligation consultation and answer any questions you may have.

“Property is my pension”

This is a very traditional Irish view. Property can be a great asset, but you have to consider the risks…

Tax Implications
You can hold direct property in certain pension structures, but it will not always qualify. If your pension doesn’t qualify (most don’t) remember that: Pension contributions attract tax relief up front ; Gains are not subject to CGT; Up to 25% of your pension pot can be taken free of tax at retirement.

Holding a property directly outside of a pension structure means you lose all of these benefits.

Liquidity and transaction costs

– When the time comes to sell, will you be able to find a buyer?

– Transaction costs are high.. Stamp duty & conveyancing upon purchase ; annual property tax and maintenance for the duration of ownership ; Estate Agent fees and conveyancing again upon sale.

Concentration risk?
If you already own a family home, you are potentially concentrating too much risk on one asset class. If there was one lesson to learn after the Global Financial crisis of 2007-12 and the concurrent collapse of the Irish property market, it is Diversification!

Call us today on 021 4773833 to set up a no-obligation consultation and answer any question you may have.

Approaching retirement?

Longer lifespans and insufficient retirement provisions have resulted in people staying in the workforce for longer. The State pension (contributory) for those satisfying certain PRSI conditions is available from age 66, but this will change to age 67 in 2021 and age 68 in 2028 – and given the unfunded liability to the state, I would not be at all surprised to see this rise further.

There are many factors to consider when approaching retirement:

When can you retire, and what retirement income can you expect?

Will you be in receipt of a tax free lump sum? If so it might make sense to invest some of this.

Avoid ‘retirement shock’ – have a plan about what you’re going to do.

Annuities – They were once the only option, but nowadays are very expensive. The Approved Retirement Fund (ARF) option has become very popular.. However don’t completely rule annuities out because of low rates. They still have a role to play in retirement, because we all need sufficient income to cover our living costs.

No annuity means no longevity insurance, and probably means you have to take investment risk in retirement.

Call us today on 021 4773833 to set up a no-obligation consultation and answer any questions you may have.