As early as possible. It is estimated that the cost to achieve the fund you that will need for a comfortable retirement almost doubles every eight years. So the sooner you start saving for your retirement the better.
Back to TopYou can claim tax relief on your pension contributions up to 40% of your net relevant earnings, depending on your age. This means that for every €1 you pay, you could claim up to 41 cent back in tax relief assuming you are a higher rate tax payer (20 cent if you pay tax at the standard rate of income tax)
If you're in a company pension scheme you will normally receive full income tax relief at source on your pension contributions You should also receive PRSI relief on your pension contributions.
It should however be noted that tax relief is not automatically granted - you must satisfy the Revenue requirements. In certain circumstances your contributions may have to be restricted.
Back to TopThis will depend upon your individual circumstances. If you have made appropriate PRSI contributions, you will be entitled to get the State Pension (Contributory) in addition to the pension from your own pension plan.
If you have not made appropriate PRSI contributions, you may be dependent on a non-contributory pension. This will be means tested by the Department of Social Welfare and may be affected by your own pension plan. Further information is available from the Department of Social Welfare.
Back to TopMost pension plans are flexible and will allow you to suspend payments if you need to, without incurring a penalty.
Check the details of your own pension with a financial adviser. In addition, remember to review any additional benefits you have on your pension (such as life assurance) as these will continue to be charged to the fund.
Back to TopYour estate and/or dependants will normally benefit from the full value of your fund. If you have life cover with your pension, the benefit to your estate and/or dependants may be increased.
Back to TopThe objective of a pension plan is to help provide you with a sufficient income when you retire. Key factors that will affect your pension fund include:
It is recommended that you review your pension plan every year, as your income and financial circumstances will change from year to year. A pension plan is a long-term investment but taxation rules, economic conditions and pension legislation are changing all the time.
Back to TopThe position of your pension fund will then depend on the income option you selected at retirement.
If you opted to buy an Annuity Plan, the pension will cease on your death, but your spouse may receive a pension depending on the annuity plan selected by you at retirement. In some instances your pension will continue to be paid for a set period if you selected that option at retirement. However, in general no funds will be payable to your estate for the benefit of your dependants.
Provided that you qualified if you opted at retirement to transfer your retirement fund to an Approved Minimum Retirement Fund (AMRF) or an Approved Retirement Fund (ARF), the balance of these funds, on your death in retirement, can be transferred to an ARF owned by your spouse.
On your death (or your spouse's death, if later), the balance of the fund can be paid to your or your spouse's estate for the benefit of dependants on which tax is likely to be payable.
Back to TopYou may contribute to several pension plans, but you will only be able to claim total tax relief up to certain limits.
You may not have a personal pension plan and be in a company pension plan unless the two plans relate to two separate and distinct sources of income.
Similarly if you are in a company pension plan (and have no separate source of earnings) you will only be able to claim tax relief on AVCs made to either the company pension plan or an AVC PRSA. In that situation, you cannot claim tax relief on contributions made to a PRSA unless you have a separate and distinct source of income.
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