Start saving for retirement
March 29, 2017
Do you look forward to retiring? While the thought of not having to work can seem appealing to all of us, you will need to put aside some time to plan how you will fund your retirement. Check out our questions below to help get you started:
Why should I worry about planning for my retirement?
When you retire, you will no longer be earning your regular salary, so having a pension in place will help maintain your standard of living. If you had to live on a state contributory pension, you would get €233 or €243 a week, depending on your age. If you feel you would need more than this to maintain your lifestyle, it’s wise to start contributing to a pension as early as possible.
Where do I start?
If you are young and have just started working, you should start your pension now by putting away a percentage of your salary each month. Check with your employer, as they may provide an occupational pension scheme.
Even if you are older, it’s not too late to start. You may be earning more now than you did in your twenties and can afford to put a bit more towards your pension.
No matter what stage you are starting a pension at, you need to sit down and make a budget so that you can clearly see how much you can afford to save. You also need to think about the type of lifestyle you would like to have when you retire, and figure out how much you’ll need to save to achieve this.
One of the big advantages to starting a pension is that you get tax relief on pension contributions and on any growth in your pension fund up to a certain limit. This makes a pension a tax-efficient way to save for the future.
What are my options?
The next step is to decide on the type of pension that’s right for you. This depends on your personal circumstances – for example, are you an employee or are you self -employed?
If you are an employee you may be able to join a pension scheme provided by your employer. The advantage to an employer pension scheme is that your employer will usually make a contribution to your pension in addition to your own, which increases the value of your fund. If your employer does not offer a pension scheme, then you must be provided with access to a standard Personal Retirement Savings Account (PRSA).
Should I get financial advice?
If you are an employee, your first port of call should be your HR Department. However, if you are self-employed or you want to get more advice, financial advice can be very helpful, as it can be hard to know where to start. We have information to help you understand what sort of financial advice you might need, how to choose a financial advisor, and how much it may cost you.
What if I take a break from work?
If you have a pension plan with your employer, it’s a good idea to find out how it might be affected if you were to change your working arrangements, or take a career break.
Once my pension is set up am I off the hook?
Once your pension is set up, it’s important to regularly review your pension plan to see how it’s performing, especially to make sure you are contributing enough to give you the income you need at retirement. This is particularly important if you have a defined contribution plan.
So, no more excuses! If you haven’t yet started a pension, get down to it as soon as you can. The sooner you start saving, the longer you have to build up a pension. And knowing that you’ll be financially secure when you retire (even if it is years away!) is a great feeling.
Published Date: 29/03/2017