Retirement Planning
Pensions are no longer guaranteed
At its core, a pension is simply a long term savings plan designed to replace your income when they stop working.
Retirement planning can however be a complex area which may go some way to explaining why less than 50% of people in Ireland have a pension, and why many of those who do aren’t saving enough into it. The State Pension (Contributory) may provide some level of income replacement but some of people may not qualify for it, and the age at which it becomes payable is increasing.
With company pensions no longer guaranteed, people living longer, and question marks over the sustainability of the State Pension, there is a greater onus on us all to fund for our own retirement. This increased responsibility combined with the continuous legislative changes in the pensions industry means that getting retirement planning advice from a qualified financial advisor has never been more important.
Pension coverage - some facts from Central Statistics Office (CSO)
An interesting finding is that 36% of respondents are set to rely on the State Pension as their only form of income in retirement.22% of those without a private pension said that they never got around to organising it – do you have a pension/adequate pension plan in place?
Approved Retirement Fund (ARF) or Annuity?
There are a number of options available to those with maturing pensions at retirement. Typically the maximum tax-free lump sum is taken. When weighing up the options regarding the balance of the fund, people are confronted with two main choices:
whether to invest in an ARF/AMRF or to purchase an annuity.
This is a big decision to make with a lot of considerations to take into account, including income requirements in retirement, providing for family, health (of the individual and family) and attitude to risk. All of these, and more, should be discussed to allow you to make an informed decision on the best possible option at retirement.
Generous tax incentives
Using a pension to save for retirement offers the opportunity to avail of a generous range of tax incentives not available through any other savings product.
You can claim tax relief on your pension contributions,
Your fund can grow tax free,
You can take a lump sum of their savings tax free at retirement (subject to limits), and
There is the potential of tax free regular income in retirement if your income falls within the income tax exemption limits.
We are here to help you make a better decision.
Want to know more? We are available to discuss your options, and we look forward to hearing from you.
Our job is to help you choose a product and structure that will help you meet your goals.
telephone | 091441188 and/or email | office@nelsonlife.ie
RETIREMENT & PENSIONS | INVESTMENTS | FINANCIAL PLANNING | LIFE INSURANCE
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