At Bua Financial Services, we offer practical advice and support on how to efficiently plan for your retirement and be financially independent when that time comes. Depending on what stage in life you are at, retirement may seem like a distant event but it is important to start planning for your retirement as early as possible.
A pension is one of the most tax efficient ways of saving for your retirement. Currently, you will receive tax relief on your pension contributions at your marginal rate (20% or 40%). You can also receive a tax free lump sum of up to 25% of your pension fund on retirement (subject to a limit of €200,000). In addition, any growth in your pension fund may be tax free.
Retirement usually occurs between ages 60 and 70 and many of us will rely on our pensions as a steady source of income. Most clients wish to be in a comfortable financial situation so that they can enjoy their retirement to the fullest. For many, the state pension and their occupational pension, if they have one, may not be enough to support their retirement plans. Supplementing your pension benefits with a private or alternative pension plan is the best way to boost your retirement finances.
There are many different pension plans and options available including:
Private Pension Plans
PRSA (Personal Retirement Savings Accounts)
PRBs (Personal Retirement Bonds)
AVCs (Additional Voluntary Contributions)
A PRSA (Personal Retirement Savings Account) is a personally owned pension that lets you save for retirement on your own terms. It is flexible in that you can make contributions at any time or stop making contributions at any time. You can take it with you if you change jobs or take a career break.
A personal, or private, pension is held in your own name and only you make contributions to it. This may be suitable for you if you are self-employed or if your employer does not offer an occupational pension. A personal pension can enable you to become your own investment manager.
A PRB (Personal Retirement Bond) lets you take your pension entitlements with you when changing jobs, without having to transfer to your new employer's scheme. You have control over your pension plan and how it is invested.
An executive pensions is a pension designed for company directors and owners.
AVCs (Additional Voluntary Contributions) are optional payments to an existing pension scheme, to build up an additional retirement fund.
Retirement Planning – Frequently Asked Questions
What is the best pension plan to get?
There are a lot of great pension plans available and the best one for you will depend on your individual circumstances. When choosing a pension plan you will need to consider your employment options, your current financial situation, how much you hope to have saved, etc.
When Should I Start Planning For Retirement?
The best time to start retirement planning is as soon as you are able to. The sooner you start saving money in a pension plan the longer you have to contribute to it, meaning more money in the pot when your retirement does eventually come around.
Can I Transfer or Change My Pension Plan?
As you go through life your financial situation and employment status will change. It is possible for your pension plan to change in line with this. Certain pension arrangements allow for the transfer of your pension to another plan. The most common changes are transferring from an occupational pension scheme to a private pension plan.