Have you considered what your life could be once you retire? We’re all living longer lives, and although this isn’t exactly a surprise, it’s more vital than ever to start planning ahead for those years when you will not be working anymore.
It’s best to start as soon as possible in securing your future by saving now for a pension. So, if you haven’t already, here are seven reasons why you should begin putting money into your pension pot.
The State Pension may be insufficient
Could you rely on the state pension alone? The state pension for those aged 66 and above is currently € 248.30 per week, and quite possibly wouldn’t be enough to meet all of your demands in retirement.
It’s also possible that your state pension will be less than your present salary. As a result, when you retire, you won’t be able to maintain the same standard of living.
Furthermore, and given Ireland’s economic and demographic circumstances, the government may be obliged to cut the cost of the state pension. People need the state pension for a longer length of time since we are living longer. To put it another way, you can’t be certain that your present pension income will be the same when you retire.
In Ireland, life expectancy is rising
On average, we are living longer, which is certainly a good thing. However, because your retirement will be longer, you may need to save more money. Putting money into a pension will allow you to forecast how much cash you’ll accrue and how much you’ll need to save over time. You also have the option of reviewing your monthly payments and increasing them if your income rises.
You’ll be able to save money on Taxes
Therefore, putting money into a pension is a tax-efficient method to save money over time. Did you know that you can get tax savings on your pension payments? That is, while collating your income tax, the portion of your income that went into your pension is not taken into consideration. Read our post on tax reduction on pension contributions for more information.
In addition, you may be eligible for a tax-free amount of money when you retire. You can choose to collect a portion of your pension money as a lump sum payment once you’ve withdrawn.
It’s vital to understand that the maximum tax-free amount is € 200,000.
You can take charge of your Finances
When it comes to investing in a personal pension plan, you have a wide range of alternatives. A financial adviser will help you and identify the best choice for you based on your present position and future objectives. In fact, you may choose from a variety of investment options, including property funds, bonds, share trading accounts, and more.
You can also select how you wish to spend your assets in retirement, and in certain circumstances, you may be able to retire or withdraw your money early.
A Pension can turn out to be a Life Insurance for you and your family
Many pension plans will pay out a lump sum amount to the persons you designate as your dependents in the case of your death. In addition, certain pension plans may provide a “survivor pension” to an existing dependent. Your spouse or child, for example.
You can start your Pension with a small Investment
One of the most common misunderstandings regarding pensions is that they require a large amount of money to begin with. Thankfully, this is not the case. Indeed, you may discover choices in Ireland for as little as €100 per month. In the long run, you’ll be able to increase your monthly payments if you wish, but at the very least, you’ll have a foundation for building on.
Furthermore, the sooner you begin saving, the better, and you will save more money since you’ll have more time to grow your fund.
You’ll be financially Independent
Consider all the things you’d like to do when you retire. Perhaps you’ll wish to travel the world, relocate to a rural area, or simply live within your means. You won’t want to be concerned about money, no matter what your goals are, and that’s why investing for retirement now is a wise decision.
It’s more beneficial if you already have a source of income for your retirement, as your pension fund will offer additional income and financial stability.
Want to know more? Contact us today!
Our certified financial experts will assist you in making an educated choice by determining the best course of action.