Pensions

You should look forward to your retirement but many people spend it worrying about how to make ends meet. Pensions can be confusing and there are so many other things to spend your money on. But a pension is one of the most effective ways to save money. Plus you benefit from tax relief on the money you save!

Investing for retirement can seem a challenge as there are seven types of pension plans...

1. 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.

2. Personal Pension Plan - is a pension that is managed for you by the pension provider. Anyone can start one but your employer normally can't contribute to it.

3. Group pension - is a pension provided by an employer. Its' benefits include; helps attract and retain good staff, great tax advantages for employers and employees, can be a tool to reward loyal employees in a tax-efficient way, can be tailored to provide cost effective life assurance and disability benefits.

4. Group PRSA - lets an employee take their retirement account with them when changing job. Group PRSAs are now available, prividing a platform where PRSAs are administered on a group basis. It's benefits include; fewer employer obligations, no trusteeship burden, no fines, no audit fees and ARF option after retirement.

5. Self Directed Pension - lets you manage your retirement funds personally. The benefits include; Control - direct how your pension fund is invested and managed. Choice - choose from a range of asset types including shares, bonds and collective investment vehicles for your pension. Tax-efficiency - Tax relief and tax-free growth for your pension. Transparency - Clear charging structure

6. Executive pension - a pension designed for company directors and owners. Its' benefits include; Tax free contributions, Your employer can also contribute. Take a tax-free lump sum depending on length of service, salary and fund size

7. Retirement Bond - lets you take your pension entitlement with you when changing job without having to transfer to your new employer's pension scheme. It's benefits include; 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.

Addtional Voluntary Contributions (AVCs)

Members of an occupational pension scheme, then you may be in a position to improve the benefits you receive on retirement by making AVCs.

After you retire

You can invest the proceeds of your pension fund in an Approved Retirement Fund (ARF) after you retire, for which the key benefits are;

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

If your guaranteed annual income is under €12,700 you must take out an Approved Minimum Retirement Fund (AMRF) first. €63,500 of your retirement fund is put in the AMRF and the rest into an ARF.

So, as you can see, making decision about pensions can seem a bit daunting. But by providing you with sound clear explanations and prudent advice we, at face2face, can make your investment in your future retirement straight forward, efficient and very profitable.

Contact Us (HERE) today to arrange a financial review to discuss analyse your investor profile and figure what type of long and short term financial planning would suit you.

Mark Dunne t/a face2face Personal Finance is regulated by the Central Bank of Ireland.