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Blog Homepage > Make a Smart Choice – 3 Reasons why a Pension is a Must-Have Item

26/08/15

It’s no secret that it’s a good idea to start thinking about your pension entitlements as early as possible. But it’s often something that remains on our to-do list. However, there’s no time like the present to tick this one off your list and help to start securing your financial freedom upon retirement. Still need convincing?

Read on to see 3 reasons why you should prioritise your pension today and see how you can make it even better:

 

1) Starting early is important

In your twenties or thirties? This is the perfect time to put money aside, so you start building up your investment slowly. Your Superannuation Pension may seem like it’s enough, but it is highly advisable to think about the benefits of making Additional Voluntary Contributions (AVCs) early on in your career. Each year that you put off starting an AVC will mean the percentage of how much you need to invest for a comfortable retirement will increase. The earlier you start supplementing your pension, the better the pension you will have.

 

money, Euros, savings

2) Reducing your Tax Bill

When you start your pension contributions through the Superannuation Scheme, these funds are exempt from tax (up to a certain limit). An AVC is also exempt from tax, so a top rate tax payer will receive €40 tax relief for every €100 invested. This tax relief is not available through regular savings plans. Taking advantage of the tax relief on AVC contributions will help you to save a greater amount for retirement and will reduce the tax you pay along the way.

 

 

piggy bank, savings, financial planning, retirement

3) Freedom to decide when you want to retire

Whether you want to retire early, or continue working until the State retirement age, AVCs will ensure that you can retire when you decide. Want to take a cruise across the Mediterranean or spend more time with your family? Getting financially savvy about your pension and your AVC will allow you to be comfortable in your later years. When you are ready to retire, you may be able to access some or all of your AVC as a tax-free lump sum.

 

An AVC gives you greater flexibility in retirement - particularly if you want more financial freedom or want to retire early.

For more information about setting up an AVC or how we can help you plan for your financial future, call us today on (01) 420 0994.

 

 

 

 

Warning: If you invest in this product you may lose some or all of the money you invest.

Warning: If you invest in this product you will not have any access to your money until you receive your Superannuation Benefits.*
Warning: The value of your investment may go down as well as up. 
Warning: This product may be affected by changes in currency exchange rates.

 

*A once-off withdrawal of up to 30% of the value of your fund is available until 26th March 2016. Please note: withdrawals are subject to income tax at your marginal rate.