6 Important Pension Questions Answered
This is the time of year when tax returns are due, and I get a lot of queries about pensions and retirement planning in general. So, I thought I’d put together a brief note for both the self-employed and employed about the main considerations when thinking about pensions.
I hope these 6 points will help you, but no amount of internet surfing will replace advice from a qualified advisor! Talk to MoneyCoach on 1890 428 343 or email email@example.com
MoneyCoach has an experienced team of retirement planning advisors who can help you establish your retirement goals, review your current arrangements and design a retirement plan unique to your own needs and objectives.
What are the tax benefits?
A) Tax relief on both company & personal contributions
B) Tax-free growth on investment gains within the pension
C) 25% tax-free lump sum at retirement or up to 150% of your final salary
How will my money be invested?
You can choose from a wide range of investment options but typically most will be invested in a fund which is diversified across a range of asset classes, like stocks & shares, government & corporate bonds, property, & cash. The mix of investments within your fund will dictate the potential level of risk and rate of return you can reasonably expect.
Find out the risks and make a change if you don’t feel comfortable!
What are the charges?
Typically, there is an annual management charge levied on your accumulated funds and a charge on your contributions. There are other costs, which may be hidden so ask your advisor for the TER (total expense ratio) or OCF (ongoing charges figure) on your fund. Watch out for exit penalties if you are thinking of switching provider or accessing your funds earlier than planned.
When will I be entitled to the State Pension Benefit & what will I get?
The current state pension age is 66. This will increase to 67 in 2021 and to 68 in 2028
The current state pension is €243.30 per week or €12,651 per year
Need more than €12,651 a year to live? Well then, you need to get saving!
Start with working out how much you need to live on in retirement. Your advisor will calculate the fund you require to generate that income. The size of your target fund will dictate how much you need to put in to your pension and what level of investment risk you will need to take
When can I access the proceeds of my pension?
The earliest you can access your pension is age 60, but in some cases, access will be allowed from 50 onwards, subject to certain conditions
Contact the MoneyCoach team on 1890 428 343 or firstname.lastname@example.org for more information
 Subject to lifetime limit of €200,000 in tax-free lump sums from pension. Lump sum options also depend on pension type. If pension funds are coming from employer scheme, your years’ service and salary with related company will impact lump sum options.
 You may not be entitled to the full pension if you do not have enough PRSI contributions, if you have a dependent spouse, you may be entitled to a higher figure, see the Citizens Information Website for more. http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/older_and_retired_people/state_pension_contributory.html