We provide specialist pension advice to help people get to where they need to be when they reach their age of retirement.
Pension funds are more than just tax efficient saving for their future.
The primary focus of your pension fund should be to provide you with an income when you reach the age that you don’t wish to work anymore. Therefore the earlier you start saving for your non working life and the more wisely you invest along the way the better.
Get a clear focus
Most people tend to lack a specific focus as to when they would like to retire or how much money they need to do so.
Our specialist Pension consultant team will work with you to establish how much money is needed to maintain your current lifestyle and subsequently how much is required to contribute each month.
How should you invest our pension savings?
People of different ages should invest their pension funds very differently.
Traditionally people invest retirement savings using managed funds to invest in the stock market. Because of the risk associated with this type of product people coming close to retirement should avoid having their funds invested in this way.
A good rule of thumb is that 10% of your funds should move into more secure type of investments each of the ten years prior to retirement hence reducing the risk of a stock market shock having a negative effect on your fund as you near your retirement age.
Self Directed Pensions
Self directed pensions offer investors the chance to control how their pension funds are invested.
For example you can decide to put a 25% of your funds in a deposit account (with the government guarantee), 25% in managed funds, use 40% to buy a property of your choice (You can mortgage up to 75% of it) and 10% in government bonds.
By being able to choose how your funds are invested you have a much greater association with your pension fund and are more inclined to invest in it.
Another advantage of self directed funds are that you can invest in funds which have capital guarantees, which ensures you can avail of the growth of the stock markets without having to suffer losses if the markets fall in value. This offers great peace of mind for investors.
Should I contribute once a year or monthly?
Self employed people have a tendency to make annual contributions to reduce their tax bill. There are two issues with this.
Firstly it increases the risk to a person’s pension portfolio. If you contribute 12 times in a year you will invest your money at 12 different prices and have an average price for the assets in your portfolio. However if you invest only once in a year (in most cases at the time of the self employed tax deadline in October) you will buy your assets at only one price and as a result be buying at either a good time or indeed a bad one.
Secondly by leaving it until the last minute to make your pension contribution you are more likely to reduce your contribution in October. For example if a person is allowed contribute €30,000 to their pension fund they may feel that it is too much for them at one time. However if they had been investing €2000 per month during the year they would only have €6000 to face in October, this is much more manageable.
Are you self employed or a company director?
Self employed and company directors have different rules as to how they can invest in their funds and also how they draw down their pension.
Company directors can invest more of their company’s funds into their pension but have more stringent rules apply to them when they come to draw their pension.
As each case will vary our specialist team will be happy to discuss your own specific needs and advise the best course of action.
Warning: The value of your investment may go down as well as up. You may get back less than you put in.
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