Pensions & RETIREMENT PLANNING

Whether you are starting out, have some arrangements in place or are looking to maximise what you have, we can tailor a plan to suit your financial situation and goals. Your individual financial circumstances and unique vision for retirement will form your retirement planning goals. The key questions you need to think about are:

  • When do you want to retire?
  • What do you want to do when you retire?

How much will I need to save for retirement?

As a rule of thumb, generally people like to still receive at least half of their income post retirement. If we assume that on average our clients earn €120,000 at retirement then they will require an income of €60,000 per annum thereafter.

The state pension is now only €12,131 and for many this will only kick in at age 68. This leaves a remaining requirement of €47,869 per annum.

Maximising your nest egg, with care

We want you to achieve your retirement goals and enjoy the fruits of your working years. In order to protect your entitlements, we generally take a conservative approach when building your pension portfolio. We will source all of your existing plans and entitlements and maximise them for you, within a restrained level of risk. We can cater for those who seek a bolder risk approach upon request.

Our risk profiling process will decipher your comfort levels when it comes to how your funds are invested, and this will inform the approach when developing your portfolio.

What are the best options for me?

We will look at your specific personal, professional and financial arrangements to develop a plan that best suits your circumstances and goals. Stage of life tends to have an impact on how you prepare, and we will work with you over the long term to adjust your plan to match your changing situation. Here are some typical scenarios of the clients we work with and the top line advice we provide:

Age 30

I am 30 years of age and have no pension savings.

Retirement seems like an age away so why should you consider your pension plan now? To put things in context, if you were to contribute €500 – €1000 per month into a personal pension, you would end up with €500k – €1m at age 65 (assuming 6% growth). If you are a GP, Registrar or Dentist you may also have HSE benefits to be taken into consideration. Starting early puts you in a very strong financial position, allowing you to enjoy the type of retirement you want.

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Age 45

I am 45 years old, I have some pension savings but not enough.

The most common age that we see people concerned about their pension plan is from age 40. This is also the period of their life where lifestyle costs such as family and mortgages can be at their highest. Sourcing your existing funds, working out their value and identifying what you can afford to save will help to maximise your portfolio and entitlements upon retirement.

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Age 60

I am 60 years of age, I have pensions with different companies

This is a very classic example of someone who has been diligent in making pension contributions to save tax, without particularly paying attention to how it will be used in the future. Now is the time to see exactly how these funds are invested, when they will mature and how you can use them to your benefit.

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Pension Fund Terminology Explained

People are faced with a lot of jargon when it comes to pension plans and funds. The following is a glossary of terms, explaining the key options and whether or not they are relevant to you depending on your employment circumstances.

  • Self-Employed
    • Personal Pension
    • HSE / Mercers Fund (for GMS Doctors)
    • Superannuation
    • AVCs
  • Employees
    • Defined Contribution Group Scheme (private sector)
    • Defined Benefit Group Scheme (public sector)
    • PRSA – Personal Retirement Savings Account
    • AVCs – Additional Voluntary Contributions
  • Company Structure
    • Executive Pension

What happens next? How do I access my funds?

Accessing your tax free lump sum and accessing your entitlements throughout your retirement

So, let’s assume you have saved a pension fund of €1,000,000 at age 65. What can you do with it? Firstly you are allowed to take 25% in cash. You will pay some tax on this withdrawal but will still be left with €240,000.

The remaining €750,000 will be used to provide you with an income. You can then choose to just take the growth on it (or no less than 4%, see above) or you can decide to make some assumptions and withdraw at a higher level than it is growing by until the funds are used up.

So, if we assume you wish to take 6.5% from the fund and that the fund grows at 5% net, the fund will last you until you are 93. This will satisfy the requirement of the additional €48,000 needed to bring the pension to €60,000 per annum.

When it comes to passing on your estate, it is essential to plan ahead. Ireland’s inheritance gift tax is one of the world’s highest and tax bills are due soon after the inheritance has been received. Planning ahead will ease the process and help beneficiaries avoid the difficult situation of facing large tax bills and / or decisions on selling assets.

We will talk you through the variety of ways that you can plan ahead including:

 

  1. Gifting funds throughout your lifetime
  2. Gifting the family home
  3. Taking out a relevant Life Assurance policy

Online Enquiry Form - Pensions & Retirement Planning

Please submit your information below and an adviser will be in touch shortly.

Online Enquiry Form - Pensions

Please submit your information below and an adviser will be in touch shortly.

As an independent firm, we provide tailored advice according to an individual’s personal circumstances. We work with the following institutions in relation to retirement planning: