The State pension retirement age has been in the news a lot lately. Will the qualifying age be extended upwards or be reduced back down? Only time will tell, we mere mortals have no control over this. However, we have control over starting a pension and completing a review of existing Pensions – Active or Paid up pensions. A pension is deemed to be “Paid up” when you are not currently paying any money into it.
Here are the first 5 areas to consider:
That means that the current State Pension promise will be unsustainable in 2050, this is the main reason the Government has raised the State pension age to age 68. With the average life expectancy increasing every year, our time horizon for living in retirement may be much longer than we realise. That is why we need to take control of our own future lifestyle by making sure we have enough money to maintain that lifestyle. The word “lifestyle” can have a different meaning for everyone, for some it’s being able to continue the day to day activities you currently do with your income. To others it’s travelling to exotic places. Either way, our personal retirement savings will help us to sustain our lifestyle in support of the state pension.
While some people will benefit from a pension arranged by their employers, other employees may have started personal pension plans. Some people will aim to use a property as their way to fund their retirement. However, according to the most recent CSO report, approximately 40% of the population aged 29 -69 have no pension. Of the remaining 60% most people are not putting away enough savings also referred to as funding their pension.
Some people wonder, ‘are pensions worth it?’ when they first begin thinking about this process. The simple answer is yes. While your monthly costs may be less when you are retired, you will still have outgoings, especially if you wish to complete your bucket list or just enjoy being retired. Simply put, a pension is a long-term saving plan which is extremely tax efficient. These tax breaks are as follows:
Just start! Don’t put it off any longer, as mentioned previously, the earlier you start the better. Revenue dictates the maximum you can contribute called Age-related percentage limit for tax relief on pension contributions. With a total earnings limit of €115,000 per year used for calculating tax relief. These are the age related thresholds:
This is determined by your employment status:
Next week’s blog will cover what you should be doing once you have your pension in place.
Contact Murray & Spelman
If you would like to learn more or ask specific questions, please contact us below.
Contact Murray & Spelman Financial Services Ltd over the phone or by email, to find out more and receive a complimentary consultation.
Kildare 045 888 007
Galway 091 759 555
Murray & Spelman (Financial Services) Ltd help you plan for your future, while you live for today!
Murray & Spelman Financial Services Ltd is Regulated by the central Bank of Ireland. All details and views contained within this article are for informational purposes only and does not constitute advice. Murray & Spelman makes no representations as to the accuracy, completeness or suitability of any information and will not be liable for any errors, omissions or any losses arising from its use.