Personal Pensions

What is a Personal Pension?

In a nutshell, a Personal Pension is basically a long-term tax efficient savings plan.

Any money you pay into a Pension Plan, you receive tax relief on at your marginal rate i.e. 20% or 40% currently. The Pension Fund grows tax free and at retirement you receive a tax-free lump sum of 25% of the total fund.


 


Who can take out a Personal Pension?

Anyone over the age of 18 who is working and not a member of a company Pension Scheme


What do I need to pay into a Personal Pension?

The main thing is to start paying into a Pension Plan with an amount you can afford and build on it from there. The hardest part is getting started. To give you an idea of what you would need to be paying, please click here to use our handy Pension Calculator.

 

When can I draw down the Benefits?

With a Personal Pension, you can draw down the benefits anytime between the ages of 60 and 75. You can still be working when you draw down the benefits.

You can only draw down the benefits before the age of 60 if its due to ill health.

 

What do I get at retirement?

The earlier you start and the more you save the bigger your Pension pot will be. You will receive a Tax Free Lumpsum equal to 25% of the Pension Fund. The remaining balance of 75% of the Fund is used to provide an additional income on top of the state pension. The remaining balance can be re-invested in a post-retirement product called an AMRF/ARF or can be used to purchase a guaranteed income for the rest of your life (pension). Any withdrawals from the 75% balance are subject to tax, USC etc.(if over a certain amount – currently a person over 65 can earn €18,000 pa tax free including the state pension)

 

Revenue Max Contribution:

The max contribution you can make to a Personal Pension currently and claim tax relief based is based on age, the older you get, the more Revenue allow you to contribute as follows:

Saving for retirement

Under age 30 = 15% of earnings

30 to 39 = 20% of earnings

40 to 49 = 25% of earnings

50 to 54 = 30% of earnings

55 to 59 = 35% of earnings

60 and over = 40% of earnings


How do I get started?

Call us today on 0599133800 to arrange a Free Pension Consultation or email yvonne@mccormackgroup.ie


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