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savings and investments

Personal Pension Plans Monaghan

A personal pension plan is ideal for those who may be self employed or may not have the benefits of a workplace pension. The current state pension in Ireland is €238.30, not insignificant but nevertheless considerably lower than minimum wage and the cost of living. To supplement this income later in life, we would always recommend putting in place a personal pension plan that will ensure you never have to worry about money at a time in life when you should be able to kick back and relax.

Supplementing the State Pension

Prior to putting your personal pension plan in place, we would always ask you the following questions:

  • Retirement age: At what age do you hope to retire?
  • How old are you now: This tells us how many years of contributions you can make prior to retirement.
  • Your current income: When we put in place a personal pension plan for you, we need to make sure it’s affordable and that you can keep up the payments without any financial pressure.
  • Do you wish to contribute weekly, monthly, quarterly or annually?
  • Would you be in a position to inject lump sums into your pension plan at any stage, perhaps through bonus payments or commissioned earnings?

(Note, you can contribute lump payments at any time during your pension plan.)

  • What are your expectations for retirement, do you hope to travel, retire abroad?
  • Will there be family members that will be supported by your personal pension?

Tax Advantages of a Personal Pension Plan

The most tax efficient method of saving for your retirement is through a personal pension plan. Tax relief is available for every €1 you contribute to your pension plan at your current rate of tax. So let’s say you are currently paying tax at a rate of 40% on your income, this is the same rate of tax relief you can claim on every Euro. This incentive allows you to claim .40c back on every Euro you contribute to your pension fund. For every €1,000 paid into your pension plan you can claim back €400. The same calculations apply for all tax brackets.

Please see the table below for limits on income tax relief by age group:

Age in Year Maximum tax deductible contributions as a % of your earnings (max €115,000 earnings)
29 or Younger 15%
30 to 39 20%
40 to 49 25%
50 to 54 30%
55 to 59 35%
60 or more 40%

 

Accessing your Personal Pension Plan

Your plan becomes accessible from your 60th birthday or in instances of retirement because of poor health.

It is also worth noting that the state pension only comes into effect at the age of 68 for those who were born after or on the 1st of January 1961. This is 2 years later than the previous pension age of 66 and will have an enormous impact on those wishing to retire at an earlier age. It is now more important than ever to invest in a personal pension plan so that you can retire from the age of 60 without having to wait on the state pension.

Here at Eugene O’Doherty Financial Services we will speak with you and take the time to understand your financial requirements after retirement. Personal pension plans are best taken under advisement from a qualified financial advisor to ensure you get the very most from your savings.

Pension Planning Monaghan, Sligo, Galway & Kilkenny and Nationwide

To speak with Eugene about investing in a personal pension plan, please get in touch by calling (047) 82000 or fill out the contact form on this website and he will get back to you as soon as possible.

Eugene O’Doherty Financial Services offers personal pension plans to those in based anywhere in Ireland.

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