10 Reasons why pensions still make sense.

First things first regardless how you do it in order to retire you will need a retirement plan of some sort. This will allow you to give up work when you want to but it will require saving money in one way shape or form.

Here are 10 reasons why we believe that pensions still make sense.

  1. What will the state pension be in the future? It is currently €230.30 per week for a single person. €436.60 per week with an adult dependent allowance.Currently there are 6 workers supporting 1 person in receipt of the state pension.This ratio will fall to 2:1 by 2050. Pressure is already on that state pension as most of us know.
  2. The state pension age is increasing to 68.
  3. We are all living longer and therefore can enjoy many years after we retire? Or can we? The only way we can enjoy those years is to have money in reserve. Ever notice how you tend to spend more at the weekend than during the week when you are working?? Retirement can be one LONG WEEKEND!!!!
  4. Income tax relief is still applicable. If you pay tax at 20% for every €1 you save in your pension your tax bill reduces by 20c. If you pay tax at 41% for every €1 you save in your pension you will reduce your tax bill by 41c.
  5. You will receive a tax free lump sum at retirement.
  6. For some you can get tax relief on your life cover thus making your life assurance costs cheaper. Please get in touch for more information.
  7. The ARF option is now available to all members of Defined Contribution pension schemes and not just for company directors or the self employed. Please get in touch for more information.
  8. There are major tax benefits for pension both pre-retirement and post-retirement from an inheritance tax planning point of view.
  9. There is a tax benefit on the gains achieved in a pension known as gross roll up. You do not pay tax on any investment gains in your pension unlike with deposit (dirt) or assets (CGT). There are tax implications when drawing your pension but again please get in touch for more information.
  10. The choice you have now with regard to where you invest your contributions is a lot wider than in the past. You can take market risk out of the equation and put your money on deposit. You can take as little or as much risk as you like.

A pension is not a risky investment. A pension is a tax efficient form of saving for your retirement. The risk comes from the area around where you invest your contributions. This is a separate conversation within the whole process.

Here are another 5 reasons why a pension makes sense.

  • You will retire at some stage and you will need money.
  • You will retire at some stage and you will need money.
  • You will retire at some stage and you will need money.
  • You will retire at some stage and you will need money.
  • You will retire at some stage and you will need money.

We are on hand to help and would be delighted to work with you over time to achieve the retirement plan you are aiming for. Call 0719159222 for an appointment.

 

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