Setting up a pension plan for the right reasons
With only days left to the tax deadline for 2016 tax returns, many people over the past few weeks have contemplated paying in to a pension in order to claim tax relief on their 2016 return. While this is extremely prudent and strongly advisable, I feel at times people may overlook the main reason for setting up a pension namely to give yourself a retirement income at a time of your choice.
Yes, the tax relief is a huge incentive particularly in light of the fact the fund also grows tax-free throughout the term and it is by far the most tax efficient method of saving available to an Irish Citizen. What is more important in my opinion is for people to target a fund that they would like to live on when they reach normal retirement date. With retirement age now pushing out to age 68 and many peoples’ contracts at work finishing at age 65, many people are going to be faced with an income gap from age 65 to age 68 and beyond unless they have a plan in place.
It is important that you plan a pension as soon as possible and plan with the intention of providing an income for yourself/family. While the State Contributory Pension is presently reasonable relative to other countries, and currently pays out €238.00 weekly, do you feel you could live on this amount? If so, you have no further need for pension planning. However there are no guarantees that this State Pension payment will be available to you when you reach retirement. And if so, the age at which you receive state retirement benefit could be pushed out to age 70 and beyond as reported lately.
I doubt very much that anyone feels they could live on this amount and particularly if they take cost of living increases over the next number of Years. Therefore, it is prudent and important to take control now and start making provision to give yourself a fund that will meet your retirement needs.
Call me today on 064-6636410 and together we can review and provide for your retirement needs.