Pensions

What do you want to do when you retire?

Retirement pensions provided by the state have long been recognised as being inadequate to provide sufficient income for you when you retire. We will provide you with the most suitable pension advice to ensure you enjoy a comfortable lifestyle during your retirement from your working life. This will depend on your employment details, whether you are self-employed, an employee, or a company director. Our experience and knowledge mean that we can recommend the best pension advice which suits your needs.
We will help you to review your current situation. We will outline the retirement benefits available to you and identify what you must do to ensure that you have sufficient pension income at retirement.

Planning

We offer comprehensive financial planning advice, we can also make sure your finances are as tax efficient as possible and can recommend ways to combine tax and pension planning for individuals, partnerships and companies to make the most of all possible tax saving opportunities.

Retirement planning is spilt into two phases:
  • Accumulation stage
  • Retirement stage

During the accumulation stage, we need to ensure you are making adequate pension provision to provide a comfortable retirement. We will also review your investment strategy to ensure it is aligned with your attitude to risk. We can review existing pensions and advise on new plans where necessary.

Retirement Stage: At retirement there are several options open to you with your Pension Fund.

  • You can take some of your pension as a tax-free lump sum.
  • After taking your tax free lump sum, you have the option of purchasing an annuity (a guaranteed income for life) or investing the balance of your pension fund in an Approved Retirement Fund ( ARF). We will discuss all of the options available to you on retirement, to enable you to make an informed decision as to what best suits your needs.

Range of Pensions

If you are self-employed or working as a sole trader, you can have a personal pension plan to provide you with financial security when you retire with the benefit of immediate financial reward – every euro you save reduces your income tax bill.

A PRSA is a Personal Retirement Savings Account. It’s a portable retirement account so you can take your PRSA with you when you change job. Your employer can contribute to your PRSA, unlike a personal pension where employers can’t make contributions.

An effective retirement planning tool that enables business owners, company directors and key employees to plan for their retirement in a tax efficient manner.

In a company pension plan your employer must pay at least one-sixth of the total amount into your pension plan with you. Your employer will get tax relief on this money paid in for you, making it a very tax efficient way to reward employee’s loyalty.

If you are a member of an occupational pension scheme, then you may be in a position to improve the benefits you receive on retirement by making AVCs through an AVC or a  PRSA AVC.

A personal retirement bond (PRB)  lets you take your pension entitlement with you when changing job without having to transfer to your new employer’s pension scheme.

Benefits:
  • no need to transfer to your new employer’s pension scheme
  • choose the fund that your money is invested in
  • choose when to take your benefits
  • any investment growth is tax-free

Now that you’re about to retire, you have one more important decision to make – how to use your pension fund to provide yourself with an income throughout your retirement.

Depending on your circumstances as you approach retirement, there are different options for you to consider.

You have the option to take a tax-free lump sum.

After taking your tax-free lump sum, you have the following options with the balance of your retirement fund:

  • Take a taxable lump sum in certain circumstances
  • Purchase a pension (Annuity) for life.
  • Invest in an Approved Retirement Fund (ARF)

 

Tax free & Taxable Lump Sum’s

Most pension funds give you an option to take up to  25 % of the value of your  retirement fund as a lump sum.

The first € 200,000 of this  lump sum is tax free.

Any lump payment between € 200,001 to € 500,000 is taxed at 20 %.

Any lump sum in excess of € 500,000 is taxed at 40 % and is subject to PRSI & USC.

There is also an option with both Executive Company pensions to take a tax free lump sum based on your final salary & service. The longer your service & the higher your final salary, the higher your retirement lump sum will be.

With an Approved Retirement Fund (ARF) you manage and control your pension fund after retirement. You can make withdrawals at any time, subject to the terms of your chosen investment option. These withdrawals are treated as income and are subject  to income tax.

You can invest the proceeds of your pension fund in an Approved Retirement Fund (ARF) after you retire.

Benefits:
  • Regular income from this fund
  • Control over your investments
  • The funds in your ARF are available to your family after your death.

No matter what type of pension plan you have, you have the option of using some (or all) of your retirement fund to purchase an annuity This will provide you with a regular secure source of income for the rest of your life.

You can purchase an annuity on a single life basis or you can include an annuity to be provided for your spouse on your death.