How is your retirement funding going? Do you have a suspicion that you could be doing more when it comes to your pension or other retirement plans you might have? It is recommended that people should aim to have an annual income in retirement of two-thirds of their final salary. Use the Pensions Authority calculator to check you’re on track.
Have you considered?
Additional Voluntary Contribution (AVC)
An AVC (Additional Voluntary Contribution PRSA) is a way to save excess cash in a tax-efficient manner outside of your company or occupational pension scheme. For more on AVCs and why you might need one, read our blog on the subject.
Are you a company director? Funding a director’s pension is one of the most tax-efficient means to transfer wealth from a limited company structure to a personal asset. To put it another way, in a director’s pension, the company wealth grows tax free. A major advantage of a director’s pension over a regular PRSA is that you can make higher contributions than to a PRSA. The company benefits by way of corporation tax relief of 12.5% on contributions and savings on pay-related social insurance contributions on employer pension contributions. Director’s pensions are ideally suited to companies with substantial cash reserves, which would ordinarily attract corporation tax (if declared as profit), or income tax (if taken as salary).
If you’re an experienced investor or you like the idea of having more control over the funds in which your pension is invested, you might be interested in a self-directed pension. This kind of pension gives you access to a more extensive range of asset types, including property. At Clear Financial we offer a wide range of investment alternatives including renewable energy investment opportunities which can be funded via self-directed pensions.
Self-administered pension schemes
If you’re the director of a limited company, and like the idea of having complete control over your pension, you could set up a self-administered pension scheme. This is done by way of a pension trust rather than a life company. You and the other trustees have complete control over how you invest the funds (subject to compliance with Revenue rules). You can transfer an existing pension into a self-administered pension scheme.
Can you afford to lose track of nearly €15k?
The Guardian (May 2019) reported that in Britain an estimated £19bn is ‘lost’ to workers in forgotten pension pots, the equivalent of £13,000 (€14,600) per pension plan. Coming up to retirement, you need to dig out the details of any old pensions, paid-up pensions, buy-out bonds or overseas pensions. Every little helps!
Your pre-retirement check list
- What do you want your retirement to look like?
- Is your pension adequately funded?
- Do you have any old or paid-up pensions or any overseas pensions?
- Is a self-directed or a self-administered pension for you?
The experienced and qualified financial advisors at Clear Financial will help you navigate any of these areas. Give us a call and we’ll put you in touch with the advisor in your area, or have a look at our advisor profiles.