Whether you are starting out, have some arrangements in place already 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
As a rule of thumb, generally we suggest clients target 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. We have clients who have retired and €40,000 provides them with a good standard of living without being extravagant.
The state pension is now only €12,912 (March 2019) and for many this will only kick in at age 68. This leaves a remaining requirement of €47,088 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.
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.
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:
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.
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.
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%) 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:
Gifting funds throughout your lifetime
Gifting the family home
Taking out a relevant Life Assurance policy
If you would like to speak to an Advisor about your pension arrangements, please contact us by completing the form or using the using the contact details below: