HomeMany people currently working in the Republic of Ireland are failing to plan adequately for their retirement. The first thing to consider is, of course, starting a pension plan; it's been estimated that up to 46% of the population do not currently have a pension plan in place.
The state pension is currently providing pensioners with '11,976 per year, so failure to plan for retirement could see much of the population living below the poverty line.
These figures are unusual given the many benefits that come with having a pension which are not necessarily available when making other forms of investment. For example, pensions are subject to huge amounts of tax relief, for Personal Pensions in Ireland, the amount of tax relief which is given is linked to the individuals marginal rate of income tax, example: if you pay income tax at 41%, the tax man will rebate to you '410 for every '1,000 that you pay into your pension fund, subject to age restrictions.
There is no upper limit to the amount which can be invested in a pension, although there are upper limits on the value of contributions eligible for tax relief. The age of the Personal Pension contributor governs how much of their salary they can contribute to the pension and receive tax-relief on. The older you are the more you can contribute to the pension and the more tax-relief you will receive.
Pension funds grow over time so the longer you make contributions, the greater the potential growth of the fund over time.
When it comes to the point at which you actually retire, it is possible to receive 25% of your Personal Pension in a one-off tax-free lump-sum, which you are free to spend in any way you wish. The remaining three-quarters of your Personal Pension fund will be released to you via your chosen options, of which there are several to choose from.
Making payments into your pension fund is a straightforward process, the choices usually consist of annual or monthly contributions, and maybe paid by direct debit for ease of payment, otherwise, you may pay by cheque/credit transfer.
About the Author:
Rochelle Martinez, Freelance Web Content Article Writer for three years. Some of her articles are about http://www.quinn-life.com