Pension Management

You may have already passed the mile-stone that is your 30th birthday, or maybe fast approaching it, either way, this article should provide you with some invaluable advice for determining how best to plan for your retirement at the life stage that begins with your 30’s.This phase of life is one of the most exciting; families are starting, marriage is well on the cards, financial stability is now within reach, there is no denying it now, you are a fully-fledged adult. It could even be that you are now acting like one too, especially if you are beginning to take your financial responsibilities seriously, as you must be to have discovered this article in the first place. You may even have set up house with a partner, have children and maybe even a pet. At this stage in your life, you may feel that you left school a long time ago now, but when you are thinking about retirement you feel yourself to be even further away from that period of your life, and technically you are, but it is those steps that you begin now which will help you to feel secure in your capacity to retire comfortably in the future. Planning for your retirement during your thirties is an important task to undertake, and the following considerations will help you to give yourself the best possible financial foundation for your future:Firstly, you are probably in receipt of the highest levels of income in your life thus far, although this will be offset by the increases in your expenditure too. In all likelihood, you have or are planning on having a family; this will mean that your household budget will be growing alongside your budding family. Your grocery bill is set to get larger with the increase in the number of people arriving in your family, and it is only set to increase as they get bigger. The size of your mortgage has probably increased too, as you upsize in order to accommodate the growing brood, not only this, the cost of taxes associated with the size of the property will also increase, as will the utility bills that you pay. And this is all to be expected. Conversely, your annual income has probably increased significantly since the time when you were a young twenty-something, trying to build the foundations of your working and home life. If you live with a partner, you will probably be feeling the benefits of living with another adult in terms of the reduction in financial burdens, after all there will now be two of you to share the increase in life costs. You may also be in receipt of tax credits, given that you now have children to support. All in all, these life circumstances, which are the usual avenues that individuals follow during their thirties, will mean that it is just as much of a challenge now to find the money to make savings than you found it in your early twenties. Secondly, it rarely gets any easier, so find the resources now to begin saving up for your retirement. The eternal optimist would have assumed that by the time they reach their thirties the time for saving will be nigh. In terms of securing a comfortable retirement, your thirties are a critical period. Each year that you defer making savings towards your retirement will affect you twofold, not only will it affect when you will be able to retire, it will also affect the level of comfort you can expect to retire in.  If you have not yet begun contributing to a pension in Ireland, then the time to begin is definitely upon you by the time you reach your thirties. If you have been making regular contributions, is there any way in which you can find any extra money to increase your contributions? Instead of booking that luxury holiday, could you opt for one closer to home this year? Every additional amount that you manage to save is going to help to increase your levels of comfort when it actually comes to taking your retirement. Finally, and possibly most importantly, maintain your focus on the long-term goal. In your thirties, you may still have another 30 or 40 years left in employment; this means that you have a very long-time to plan and save. The earlier you start, the greater the rewards and you may even be able to retire early if you keep your plan on schedule. A positive, happy retirement is more than on the cards for the diligent saver who begins to take their retirement seriously from their early thirties. This article is based on the author’s own observations and research and is not associated with any 3rd party organisations.

It seems as if the Irish working population do not like pensions.  With roughly half the workforce opting to do without a Personal or Occupational Pension, the figures speak for themselves.Perhaps these figures are not unsurprising; pensions often receive bad press. And now, when it comes to people saving for their retirement, pensions in Ireland have to compete with property investments. A massive 43% of the population believe that property will be the major source of contributions towards their retirement income. Could this be that half of the workforce are hedging their bets?  What are the problems with relying on property, without the support of a pension?Many people will think that property is a good investment because house prices have soared over recent decades. But, as the credit crunch has proven, property prices also deplete. With financial institutes forecasting a continuing slide in prices over the next decade, the property market is becoming less viable as a source of retirement income. Another problem exists too; when you rely on your retirement income from a single source, it is hard to spread the risks. Property is one industry of many, so even if you manage to build a portfolio of properties, such as investing in multiple buy-to-let properties, you will still be dealing with a single industry, if house prices fall, then all of your retirement income diminishes too.Compare this to a Personal Pension plan, in which contributions are invested in a wide range of assets such as stock/shares, bonds, and cash etc.., the Personal Pension plan begins to look like a much more reliable investment. With property, you never know what the projected costs will be. There are the standard charges that you will encounter; stamp duty and legal fees, for example. But you will also need to set money aside for repairs, maintenance, and the covering of rent if the property stands empty- and these costs are unpredictable. Although, you will not necessarily know the projected growth of your Personal Pension, you will be able to estimate, with greater accuracy, the amount of money on which you will be retiring. Pensions may seem less interesting, but the tax breaks and the range of investments more than make up for that. Plus, in order to get started in the property market, you need to have a substantial amount of money behind you. Whereas, with a Personal Pension, you will need a minimal amount and can build your nest-egg slowly over time. You can start a Personal Pension with anything as small as €50 per month.There is nothing wrong with investing in property, but it should only ever be considered as one means of providing for your retirement. A Personal Pension plan should be your first port of call; after all, they are specifically designed to provide you with a retirement income, unlike property, which can be hit-or-miss.

Some of the key questions that you should be asking yourself if you are currently seeking to start a long-term Personal Pension Plan, are: How much money will I need in order to provide myself with a comfortable retirement?What type of contribution schedule should I follow in order to meet these targets? And, for how long will I need to continue to make contributions?Deciding on the amount of money that you feel you will need in order to retire comfortably depends upon your own personal preferences. Experts advise people to begin by calculating how much income they would like to receive per year once they have retired.Once you have a rough estimate of the income you need in order to manage your retirement with financial stability, you then need to establish how much money you are entitled to already.The first place to start is to estimate the value of your State pension entitlement, for Irish pensions this is €11,976pa, or €230.30 per week. You must ensure that you are actually entitled to a State pension; to qualify for the State pension you must have made the relevant PRSI contributions while you were in paid employment- although it is possible to earn credits towards a State pension when you are in receipt of Social Welfare, or have participated in the Homemaker’s Scheme.Once you have established the amount of your State pension, you must also estimate the value of any other pension plan that you already pay into or that you may have paid into in the past.Next, you must work-out the shortfall between the total amount of income you will receive per annum and the amount that you would wish to receive.With a Personal Pension, there are no guarantees regarding the amount of growth a fund will make for the duration of the policy. In order to establish how much you need to invest, so as to ensure that you cover the shortfall between your actual retirement income and the amount that you wish to have, you may need to consult with potential pension providers in order to estimate, roughly, how much projected growth your pension will make.Ask pertinent questions such as; What timescale should I be aiming for with my pension? How much can you comfortably afford to contribute during that time (be that by monthly or annual payments)? What type of Pension best suits your needs?You may like to consult with several different pension providers in order to establish the average potential return on your pension, so as to get the most reliable projected value.

For one reason or another, you may decide that you want to transfer your pension plan to another pension provider. If this is something that you are considering the following information will be invaluable to you in making this decision.Be sure to research the benefits pertaining to your current pension and compare them with those belonging to the pension plan that you are considering transferring to. Pensions are not equal in content, and it is important for you to establish which benefits are important to you and opt for a pension that provides them. Evaluate both pension provider’s pension fund offerings and their charges. Charges are an extremely important factor to consider when dealing with pensions as they can have a significant effect on the projected growth that a pension can make. It is also vital to find out if your existing provider has transfer out penalties/fees as this can have a significant impact on the value of the pension you will transfer.If you feel that you need help with making your decision you could contact an Independent pension advisor. They are a key source of advice and information on transferring policies between providers. Because they are independent they will be able to provide you with impartial, yet comprehensive, advice. They understand the latest developments happening in the pensions market, and they will be able to ensure that you make the most appropriate decisions for your needs. A key area in which pension providers compete is the following fees and charges. Make yourself familiar with these and ask the questions when considering the transfer:- What are the annual administration/management fees?- What is the allocation rate?- Do you have a bid/offer spread?- Are there any transaction charges?- Is there an entry or transfer out fee charged?This is only a small list of the possible charges which could apply to your policy and so it is very important that you find out what fees apply to your policy before proceeding with the transfer. You need to ensure you are getting value for your money!Due to the fact that the Irish pensions industry is highly competitive, you should be able to make lucrative savings by transferring pensions.

Any person who has done even a minimal amount of research into the realms of the Irish pension plan will certainly have noticed that one of the key pieces of advice that is offered by the majority of articles, providers, financial advisors etc, is that the best time to begin making contributions to a pension plan is as early as possible. The sooner you start then the greater the dividends reaped in retirement, however, where does this leave people who have put-off their retirement plans until later years? It is unsurprising that many people in this situation will be left with a sense of desperation and worry, but the good news is that not all is lost, far from it, there are still plenty of steps that can be taken to ensure that your retirement is comfortable, regardless of the age at which you begin making contributions to a pension plan. Because any financial situation has an element of risk, it may be that a person had made good provisions for their retirement, but that some obstacle occurred and their plans were scuppered. For example, a person who chose not to pay into a pensions plan, but rather opted for the area of property development in order to finance their retirement may have found that the recent credit crisis debunked so much value off their assets that they no longer have the capacity to retire in the same manner as they had been planning. They may need to work for longer, or they could begin making contributions to a pension plan after all. For any person who finds themselves in the situation whereby they are fast approaching retirement and yet have little provisions to see them through their autumn years, all is not lost, there is still hope, and a great deal of potential to be able to retire in comfort. Whilst it may be true that certain luxuries will not come so easily now, a high standard of living is still possible through careful planning and a well-managed pension plan. If you are one of these people, then the following information should help you to organise your finances in such a way that you manage to retire comfortably:The first place to start is to construct a written financial statement that documents your current financial situation. You will need to take account of the type of lifestyle you reasonably expect to have once you retire, you must factor in all your basic expenses such as electricy, water and telephone bills, tax rates, food, clothes etc. Secondly you will need to draw up a balance sheet which must take account of the figure you have arrived at in the first step with the amount of money that you currently have set aside for retirement, such as any assets or savings. The figure you are left with will be your net worth, this could be a negative number or a positive number depending on your financial circumstances (NB. Remember to factor in any state benefits you will be entitled to, such as the state pension).  Once you have taken these steps then you will be in a much better position for understanding exactly what it is that you need to do in order to make the correct contributions to a pension plan. An independent financial advisor or pension provider will be able to help you to work these issues out more precisely and present you with a financial plan with which to move forward. If you find that you have a huge deficit between the amount of money that you actually have and the amount that you need, then it is important to begin to save every penny, this will mean making lifestyle changes, some as great as relocating to a smaller, cheaper property, other less drastic changes may involve changing the supermarket at which you shop. Another possible step towards making adequate pension contributions is to defer retirement to a later date, working an additional period of time to ensure that more contributions can be made, and whilst working this extra period you will not be touching your existing pension and thus it will continue to grow too. The most important lesson is to learn from your mistakes, if you have failed to be financially responsible and you now find yourself in a tricky predicament then you know that in future you will have to take a bit more care. You can still make good progress even if you have left your retirement plans till the last minute. This article is based on the authors own observations and research and is not associated with any 3rd party organisations.

It is important to fully consider all the options available to you when considering whether to start a pension plan. This article will provide you with some information that you need to bear in mind when making this important financial decision. When you are deciding which pension option is best for you, consider the following points:Firstly, you must always research different pension providers, as well as the individual pension plans that each company offers in order to ensure that you are fully aware of the various charges that will, or may, be levied at you. One key comparison to make are the charge differences between stakeholder pensions and personal pensions. Stakeholder pensions in Ireland often make charges on the following premises:  1) Stakeholder pensions charge management fees and these are usually issued on an annual basis. Be sure that you are informed as to the amount that they are legally permitted to charge as charges are subject to restrictions and pension providers are legally obliged to adhere to these limits.2) There are annual charges for individuals who purchase a stakeholder pension. Those individuals who purchased their pension plan prior to the 6th of April 2005 will be charged an annual rate of 1% for the duration of the pension plan. However, those individuals who purchased their plans after the specified date, or who moved their pension to an alternative scheme, will be charged at the limit of 1.5% for the first 10 years of membership.  3) In addition to the annual management fee, pension providers are able to make charges for applicable outgoings that they may have made with regards to the individual stakeholder pension scheme.   4) Services that are taken out in addition to those that are required by law must be opted for by the individual member.  5) Certain stakeholder pension providers operate a system whereby capital return is stipulated over a specific period of time, this means that if a pension holder decides to opt out of the pension prior to the set period, the amount of return may not be the same as it otherwise would have been had they opted to remain within the same scheme for the duration.   6) For employees, contributions can be added to stakeholders, occupational and personal pension plans by their employers. When considering the option of a stakeholder pension it is essential that you discuss with your employer as to whether they are willing to make contributions and also where they stand with regards to any occupational pension schemes. 7) Different pensions allow the holder to have varying degrees of control over the administration of the plan, such as the direction of funds. When choosing a pension plan it is important to determine the amount of discretion that you are hoping to have over the scheme, taking into consideration such things as whether you have the time, or the expertise, to do so.  8) For those of you who already make contributions to a pension plan, but are in two minds as to whether to remain with your pension provider, ensure that you are aware of the charges you may be subject to if you decide to change plans or provider.The commonest payment methods used by pension providers are regular payments over a specified period, but other options exist which you must consider when choosing the pension plan that is most suited to your financial situation. Certain pension providers offer customers the option of modifying the amount and instalment preferences of their regular payments throughout the duration of their pension. Whether you will be charged a fee for making such changes depends on the individual provider as well as the individual scheme and these are important facets to take into consideration when choosing a pension plan. Some pension plans exist that allow contributors to make one-off or multiple lump-sum contributions. Usually, the charges associated with such types of pension are lower than those that are paid on a regular, fixed amount, basis. Personal and stakeholder pensions are extremely effective ways of saving for retirement; they are specially tailored for that end result and as such come with many benefits, such as large amounts of tax relief on contributions made. They are also highly pertinent in this period of economic unease, as contributions can be made even during periods of unemployment, unlike occupational pensions. The information provided in this article is designed as a rough guide to pension plans, and therefore, should be considered as a starting point only. There are many avenues available for individuals who are looking for the best advice in order to ensure that they purchase the most suitable pension plan available to them. Discussing any worries or queries with a financial advisor, or a pension provider, is the best advice that we can offer. This article is based on the author’s own observations and research and is not associated with any 3rd party organisations.

When considering the possibility of starting a pension in Ireland, you need to take many different factors into account, in order to ensure that you get the best possible deal for yourself. If you want to start a pension, then the following article offers invaluable information on the best way to proceed as you embark on this important financial journey. Initially, you will need to research the various types of pension plan available to you, making sure that you know the ins and outs of all the charges applicable to the various pension schemes that you are looking at. The primary consideration at this stage is to understand charges, a good way of doing this is to ask specific questions relating to the issue. Some of the most common types of charge are listed below. You should make sure that you consider each point carefully when searching for an appropriate pension plan: – There may be stipulations for an annual management charge. So one question that is pertinent to ask when considering which pension scheme to opt for is; what, if any, are the annual charges? – As well as the annual management charges, certain pension provides will have fees that relate to any costs they may incur as a result of dealing with your pension fund, for example, they may charge if they use the expertise of an independent stockbroker. So you need to ask the question; are there any applicable charges for administration of the account, beyond the basic management fees?   - When deciding between pensions, you need to ask whether there are charges for additional services and whether these services are likely to be needed.  - Some pensions operate on the basis of predicted returns over a specific period of time, and work according to certain conditions being met during that time, such as making the appropriate contribution levels. This means that if you choose to change your pension during that period you may not receive the amount that was first predicted, and may even incur certain penalty charges. Make sure that you check with your potential provider with regards to such issues.  - Different types of pension allow the pension holder various degrees of control over the pension scheme, for example, greater choice on the type of funds towards which contributions are invested. When choosing your pension plan, make sure that you know exactly how much control you will have, and how much you need. For example, those individuals who have a good grasp of the financial industry may opt for greater control. However, if this is not your forte, or you do not have the time, you may wish to relinquish all control to your pension provider.  - If you already have a pension plan and are considering changing providers, but are unsure whether to make the change or not, then check with your current provider for any charges pertaining to this issue. In considering whether it is financially viable for you to make the change, always factor in these costs.  - Ask any potential pension provider how they take payments for contributions; do they take them annually/monthly? Is there a choice between payment schedules? Choose a pension that has a payment schedule that suits your financial background. – When considering different pension plans, make sure that you know whether you are able to modify the amounts that you contribute throughout the duration of the scheme, and whether any charges are applied to modifications. Pension schemes are the most efficient way of saving for retirement; this is because they are purposefully developed to offer the best rate of return in the most financially secure manner. As such, there are many benefits to having a pension that cannot be matched by other forms of investment. The tax-relief benefits are certainly worth mentioning as they are unparalleled, although there are caps to the limit on which tax-relief can be applied, these limits are set very high. This article is designed to provide you with a few key points to think about when choosing a pension, but is far from a definitive or exhaustible list and further research is recommended. Talking to an independent financial advisor or a pension provider should be your next step.  This article is based on the author’s own observations and research and is not associated with any 3rd party organisations.

For some individuals, the self-directed pension is a better alternative to ordinary fund managed pension packages available. The types of individuals most likely to gain from self directed pensions are those who are wishing to manage their pension portfolios themselves, as they are able to control where and how their contributions are invested. It may be that the person already has a pension, of which they have little control, and are interested in obtaining a pension with which they can have greater input into how it is managed.Account must be taken of the amount of time, effort and expertise needed to invest funds intelligently. Self-directed pensions carry higher risk than your standard pension as you are investing your contributions in more specific assets and without the input or advice from a financial advisor or fund manager.Self-directed pensions are suitable for those who want to build and self-manage their own portfolio of pension assets. Self-directed pensions provide greater control over investment decisions, than is the case with a standard pension package, they allow for greater control, flexibility and choice in deciding on the type of assets into which their pension fund will be invested. Broadly speaking, these assets can include; corporate and government bonds, exchange traded fund’s and listed equities.Common charges incurred with a self-directed pension include annual management fees, which cover administration and service costs, other charges which also apply are one-off set-up costs and third party charges which include commission based fees to be paid to stockbrokers. The pension provider will normally permit the policyholder a specific number of free trade transactions, after which there is a charge deducted from your pension fund.If you already have a pension plan and are looking to start a self-directed pension plan, then most providers will generally allow you to transfer funds out of your existing pension and into the self-directed pension. Keep in mind that some providers may have transfer-out penalties with which you should consider prior to completing the transfer.As with standard pension packages, there is no upper limit to the amount that may be invested in a self-directed pension although tax relief is capped to a specific limit.