You are never too young to start saving for retirement. The simple reality is that the state pension will not be enough. Currently pensioners receive a state pension that is equal to only one third of the national average wage. It is therefore inevitable that you will experience a significant reduction in your monthly income unless you start saving for your retirement now.
Making contributions into a pension fund is hugely beneficial for tax purposes as well.
- Firstly, you will receive tax relief on all your contributions. If you pay tax at 40%, you effectively get 40% of your contributions back from Revenue. For every €100 contributed to the pension fund you will therefore get €40 back.
- The growth of the pension fund is completely tax free.
- Lastly, on retirement you will be able to get one quarter of the pension value as a tax free lump-sum.
A pension plan can be tailored for your individual needs. You decide how much you want to invest, whether you want to invest a lump-sum or contribute monthly. You also decide which funds you want to invest in, depending on your attitude to risk. Kennedy Financial Advisors can provide independent and impartial advice to guide you through these decisions. We will also advise you of the cost involved in setting up and managing each pension plan, as this varies from each pension provider to the next.