Reviewing your pension
After you set up your pension, it is important not to forget about it! You need to review it regularly to ensure you are on track to meet your needs and wants in retirement. If this is not the case, you should make the necessary changes. You may need financial advice if you are concerned that you will not meet your target retirement income.
The are many reasons why you should review your pension, including
- To ensure that you are on target to reach your retirement income goals
- To make sure your pension fund is not being eroded by fees and charges
- To make sure your money is invested in funds that match your appetite for risk
How often should I review my pension?
Generally, you should review your pension every 12 months. You should also review if you have had a change in circumstances that may affect how much you need in retirement or how much you can contribute to your pension now. For example, if you are
- Getting married
- Having children
- Getting an increase in your salary
- Moving abroad
- Taking on a mortgage
- Receiving an inheritance
What about committing to contributing any increases in salary to your pension before you get used to the money
Your life stage
In your 20s or 30s; you may still be early in your career, so you should look at the minimum amount you can comfortably contribute to your pension and consider other goals, such as saving for a house deposit. As you have plenty of time ahead, you also have longer to allow your pension fund to grow and weather the up-and-down nature of the investment, so you may choose to invest in riskier funds that maximise this time.
If you are in your 40s or 50s, you should ensure that your pension fund will meet your expected needs at retirement. Some things to consider might be:
- Do you expect an increase in expenses, i.e., higher utility costs, increased costs for home maintenance, etc.
- Do you have any outstanding debt that you will need to continue paying off or clear in retirement?
- How much are you aiming to have in your retirement fund
- Will you still have any dependents in retirement?
- Should you move your pension to a less risky fund so that ups and downs don’t affect your retirement
Getting information on my pension
How you get information on your pension will depend on the type of pension scheme you are in.
- If you have an occupational pension, you should contact your human resource department or the relevant person who deals with HR issues
- If you are a member of a public service scheme, you can contact the relevant section in your workplace for information
- If you have a personal pension, you should contact the pension provider who sold you the pension.
Getting financial advice
Getting financial advice is important when making financial decisions. Pensions can be complex and sometimes difficult to understand, so you must know what you are getting and ensure you have the right product for your needs.
When meeting your financial advisor, some questions to ask are:
- As of today, are my funds meeting my income goals for retirement?
- What level of risk am I taking with my pension today?
- Can I switch money to a different fund? If so, are there any charges to do so?
- Can I increase my contributions, or do I need to take out an alternative arrangement, such as a PRSA or AVC?
- Am I contributing the maximum amount that qualifies for tax relief?
- At what age can I draw down my pension?
Last updated on 1 September 2023