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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Help give your child the best start in life by saving now for their education.

We all want to give our child the best start in Life. But sending your child to college can cost a lot. And with the possibility of higher University fees in the future, putting a plan in place now makes so much sense.

Cost of living for a student in Ireland for 2012/2013.

Living at home Living away from home

Annual Cost* €6,345 €10,050

Total cost over 4 years €25,380 €40,200

Source: DIT Campus Life, cost of living guide 2012/2013.

*this includes expenses, student contribution charge and rent.

With interest rates at historic lows it is hard to find value in some of the deposit accounts offered by banks.

Depending on the timescale before your child goes to college you could opt for an investment based regular savings contract, which over time could yield more than current deposit rates remembering that prices can fluctuate over the time period.

We are on hand to work with you to tailor a suitable savings plan to suit your needs and to review the plan constantly to work through any market volatility.

Contact our office today on 0719159222 to arrange a suitable time to sit down, dicuss your needs and set out a unique educational savings plan for you.

 

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COMING SOON! – Risk Equalisation

Risk Equalisation – What is this?

From 21st of December 2012, it will no longer be possible for Life Insurers to use gender, or related factors in calculating premiums for benefits for their products.

The judgement passed by the ECJ (European court of Justice) will have implications for all protection lines including;

  • Life Insurance
  • Serious Illness Cover &
  • Income Protection

It will also have an impact for annuity pricing and indeed for general insurance (car insurance) and health insurance too.

What impact will this have on Clients?

It is difficult to access at the moment but ultimately, we see life cover premiums
for female lives increasing by between 30% to 50% on current rates over the longer term. We would also see income protection premiums for male lives increasing also. It is hard to estimate the price increase but again it could be up on 50% on current income protection rates.

What should you do?

If you are female and have been thinking about taking out a life policy do so now. It will be important to pick the right protection plan, one that is flexible so that if you ever need to increase cover you will still be able to avail of today’s rates for female lives.

If you have life cover in place it is important to review this to make sure that your current plan is flexible and that if you do increase cover down the line that you will not be hit with the dearer premiums coming

If you are male and do not have income protection take out a policy now. Leaving aside the increase that is coming down the line, everyone should have income protection. Your income is your biggest asset. Protect it!

Call our office today on 0719159222 or email me at ken@flanaganford.ie and I will be able to help you pick the right plan.

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Income Protection – protecting you and your family

The image in the flyer below that we have created sums up the importance of having an income protection policy. How could you pay all your household bills and living expenses on €188 per week? You simply can’t.

Having income protection gives you and your family the financial peace of mind of knowing that at least 75% of your current salary will be paid to you until your 65th birthday at the latest.

You can tailor your plan to suit your pocket and we are on hand to help and advise you on the right plan for you.

A decision to do nothing about this is the wrong decision. A decision to examine if you can get it (certain occupations will exclude you from getting cover) and how much it costs is the right decision. Up to this point it has cost you nothing. Tax relief is allowed against the premium which reduces your cost.

The cost of not having this if an illness or injury strikes could be enormous. You would not drive down the road without car insurance why would you take the risk of having no income if you could not work???

Do not confuse or mix this with PPI (payment protection insurance) as they are 2 completely different products.

Make the right decision today and contact Ken for a specific plan to suit you @ 0719159222 or by email on ken@flanaganford.ie

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Reducing your BMI could help save you money on your Life Assurance!

Your Body Mass Index or more commonly known as BMI can determine if you are overweight, obese, underweight or normal. For those conscious of their health, calculating your BMI can lead to a change in lifestyle that may otherwise effect present or future health.

Reducing your BMI may reduce your chances of developing some conditions directly related to being overweight including:

• Coronary Heart Disease
• Stroke
• Type 2 Diabetes
• Abnormal Blood Fats / High cholesterol
• Metabolic Syndrome
• High Blood Pressure
• Cancer

However did you realise that reducing your BMI could help you save money on your Life assurance premiums?
Call us today on 071 9159222 to find out more!

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New product – Cancer only Cover now available!

Zurich Life are the first major Life Insurer to launch Cancer Cover into the Irish Market.

Cancer related illnesses account for the majority of serious illness claims with Zurich Life accounting for 69% of all serious illness claims.

What is Cancer Cover?

It is a protection product that pays out a lump sum benefit on the diagnoses of cancer of a specified severity.

Why is this so important

Cancer affects one in three men and one in four women** so it is essential that people protect themselves against the financial effects 0f illness. As Cancer Cover focuses solely on one illness, it costs substantially less than Serious Illness Cover.

**Source: Irish Cancer Society, April 2012

People suffering Diabetes who would normally be turned down for Serious Illness cover can apply and will be looked favourably for Cancer Cover because this product focuses soley on one illness.

Some Facts

  • Almost 6 in every 10 patients experienced an increase in their household bills as a result of their cancer diagnoses.*
  • 42% of men and 50% of women diagnosed with Cancer currently survive for 5 years or longer** so it is important to have finanial protection in place.
* Source: National Cancer Registry Ireland, 2010. **Source: Irish Cancer Society, April 2012

Call us today on 0719159222 for more details

 

 

 

 

 

 

 

 

 

 

 

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Your family will not thank you for being just average!

Every year life assurance companies publish the total amount
of money that they paid out in death claims. They also break this down into the average paid out for each claim.

For example here are the figures for 2 of Ireland’s leading
providers of Life Assurance:

  • Irish Life’s average claim in 2011 was €62,158
  • New Ireland Assurance’s average claim in 2011 was €60,000

Could your family survive on €60,000 or €62,158 if you died unexpectedly?

Who would pay for School Books, Clothes, ESB Bills,Food?

Ask yourself; if you did die unexpectedly would you like your family to

  1. Be the same financially?
  2. Be better off?
  3. Be worse off?

We know your answer will not be number 3.

Call us today on 0719159222 for a full review of your life assurance needs and indeed a review of the plans you currently have in place.

Your family will not thank you for being just average!

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Will you have to pay inheritance tax on the death of your partner?

1 in 10 people in Ireland are cohabitating in Ireland.
Assets passing on death between married couples or civil partners are exempt from Inheritance Tax. BUT this only applies on the case of ”legal spouses” and same sex registered civil partners. All other couples are treated as strangers for inheritance Tax purpouses.

The stranger threshold for Inheritance Tax is currently €16,750.
Inheritances in excess of €16,750 are subject to a tax at 30%.

On the death of a non married partner Inheritance Tax will be payable on the total value of all assets,regardless of how long you have been toghter.
Lets look at an example.

John Browne and Mary White take out a ”Dual life” cover of €100,000.
They are joint owners and pay the premiums out of their joint account.
John dies and the €100,000 is paid to his partner Mary Smith because she is the surviving plan owner.
Assuming that Mary inherited no other assets, and Revenue agree that she has paid 50% of the benefit, her taxable inheritance is €50,000.
The threshold €16,750 is exempt, and the balance €33,250 is taxed at 30% = €9,975.

Mary is liable for a tax bill of €9,975.
Do you think that you would have the funds available to pay this tax bill?
Most of us would’nt! If you think that this affects you I would urge you to review your protection arrangements to ensure that you and your family receive the proceeds of your life assurance plan when you need it most in the most efficient way possible.

Do it today. Call 0719159222

Information is correct as at 1 February 2012 but is subject to change.

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Why its so important to start your pension early!

We came across this in the office today, it’s an old chart but still very relevant. It highlights the importance of starting your pension early.

Estimated Retirement Fund Value at NRA 65

 

Annual Premium
€2,000
Annual Premium
€3,000
Annual Premium
€4,000
Annual Premium
€5,000
Annual Premium
€6,000
Annual Premium
€7,000
Age 30 €275,667 €417,217 €558,766 €700,318 €841,866 €983,417
Age 35 €192,118 €290,766 €389,415 €488,065 €586,712 €685,363
Age 40 €130,291 €197,193 €264,095 €330,998 €397,899 €464,802
Age 45 €84,906 €128,503 €172,101 €215,698 €259,295 €302,893
Age 50 €51,920 €78,580 €105,240 €131,900 €158,559 €185,220

 

Notes:

Estimated funds are for illustration purpouses only and are
based on an assumed investment growth of 6% p.a.

Unit prices can fall as well as rise and grow at a faster or
slower rate than assumed.

Contributions are monthly and will increase at 3% p.a to
NRA.

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How can I protect my savings against a failing Euro?

We are pleased to announce that we have a solution through Investec Bank and it is suitable for people looking for an alternative deposit currency for a portion of their savings.

The key features are:

  • 100% capital guarantee.
  • Term of 2 years 6 months.
  • Investors will earn 2.52% over the term of the investment.
  • Money is denominated in Danish Kroner.
  • No Exchange rate risk.
  • Offer closes 28th May and may close early if fully subscribed.

Please note that this is not suitable if you will be requiring any money within the 2 year 6 month term. Please also note that the product returns 1% AER and this may be below the level of inflation thus eroding the value of your funds.

The attraction here is not rate but a flight from Euro with no exchange rate risk!

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