When you are planning your return home to Ireland the mere mention of ” Retirement Planning ” is the last thing on your mind .
The idea of considering Pension options is way down the relocation list after career,property ,education, healthcare etc .
However the harsh reality for some is that they can become completely reliant on the State Pension system to fund their retirement .
The fact that we are living longer and enjoying far better lifestyles than previous generations only exacerbates the issue .So why are more people not taking out their own pensions to top up the State Benefits available ?
Probably because they do not know how attractive they are from a tax perspective.
There’s no better method of reducing your tax liability in Ireland than a Pension Plan .That applies to whether you are an Employee ,Contractor or own your own business .The Tax rates in Ireland are quite high vs other western economies with the highest rate of tax being 55% .
You have no option but to simply pay them .However ,what most people don’t know is if they saved ,for example 1000 euros into their pension they would be able to claim 55% ( 550) back in tax relief which means they get 1000 euros in their pension and they only paid 450 euro out of their own pocket.
But Pensions are bad because people lost all their money when the stock market crashed in 2008, I hear you say ,Wrong, saying this is like saying cars are bad because they crash .This is another reason why people don’t bother with pensions but the truth is that you can choose how your pension funds are invested ,so if you want low risk ,then you can get low risk .You don’t have to assume any more risk than you are comfortable with .
So if like some people ,the mere mention of retirement planning can put you off doing anything about it I do hope you’ll now reconsider if only for the chance to take a little back from the taxman every year .
Robert Whelan is Managing Director of Rockwell Financial Management to contact Robert for expert Pension advice email robert@rockwellfinancial.ie
