We often hear it said that it’s never too early to start your pension. But likewise, it’s also never too late. There’s lots of reasons why taking control of your financial future today is a good idea. People are living longer and healthier lives. So it’s important to make sure there’s funding in place to help you enjoy those years. With generous tax relief and a lot of investment options, there’s no reason why not to start a pension.
Here’s our top 4 reasons why we believe it’s never too late to invest in a pension.
The 31st of October is not just synonymous with Hallowe’en in Ireland, but it is also the office income tax deadline. But don’t worry if you missed it because this deadline is extended each year to mid-November for taxpayers who file their income tax return. You just need to use the Revenue’s Online Service (ROS) and pay your income tax liabilities through ROS.
The first thing you need to do is set a target date for retirement, see how many years you have until then and set your pension strategy around those timelines. A personal pension plan usually has a normal retirement age of 60. This means you can’t get at the money before then unless you have to retire early for health reasons. So even if you are 50 you could still have a good 10 years to save.
Tax relief is the greatest benefit of saving into a pension. If you’re paying tax at 20%, then you’re entitled to 20% back on pension contributions. If you’re paying tax on your salary at the highest rate, then you’re entitled to get 40% back on any pension contribution that you make. So, it doesn’t cost as much as you may have thought to save for retirement. You can also benefit from higher limits for tax relief as you get older as these are age-related.
The investment funds you select will be important depending on the stage you are at. While usually a pension is regarded as a longer-term investment and some risk can be taken, if you are starting later then you will need a more cautious strategy. Many fund managers offer a pension lifestyle strategy. This simply means that how your pension is invested is automatically adjusted, moving into lower risk funds, as you get closer to your selected retirement age.
Most importantly, it really is never too late to start saving for the lifestyle you want to have in retirement. Get in touch with us at Premier Insurances today for step-by-step planning from setting up your pension to selecting the funds that are right for you.