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Planning for your retirement post-employment is more important now than ever before Indeed, according to research, you can spend as much as a third of your life in retirement. Whilst this may seem appealing, it is vital that you understand how to financially support yourself in lieu of a regular income.

So why think about financial retirement planning? Nowadays people are living longer therefore more pension funds well be required. Plus many developed societies are experiencing falling birth rates, so there will be fewer working people to support you in retirement. Today’s working environment can’t rely on the state or next generation to support them in old age.

Planning Retirement Pensions
The majority of people don’t give their pension much thought.However assuming that you plan to stop working aged 65, or earlier, you will need a retirement fund to replace your income. Did you know that the current state pension provided by the Government is €223.30 per week? Could you live on the equivalent of 11,600 euro per year?

Company Pension Schemes
Where available company pension schemes are generally a very good deal as the employer also contributes to your pension fund. In the private sector a Company Pension scheme would normally be a funded arrangement, where contributions are paid into a trust so that the funds are held separately from the assets of the sponsoring company. This provides greater security for the pension scheme members, as the scheme’s assets will still be available to provide benefits even if the company fails. In the public service and in some public sector schemes, arrangements are often unfunded, which means that the employer pays pensions as they fall due on a “pay as you go basis” rather than establishing a fund in advance.

Tax Relief
{Your contributions to a company pension plan will normally be paid through payroll.| In the majority of cases your company pension plan contributions will be paid through payroll. The main benefit of this is the guarantee that you will receive immediate relief together with relief from PRSI and the health levies. This tax relief doesn not need to be claimed. The maximum contribution rate (as a percentage of total pay) on which you can receive tax relief is:

Under 30 15%
30-39 20%

40-49 25%
50-54 30%
55-59 35%
60 and over 40%

For tax relief purposes these contributions are limited to earnings up to a maximum of €150,000 in any tax year.

When can you receive Company Pension benefits?
Company pension plans provide benefits at the plan’s normal retirement age. Your pension will typically be based on your years in the company or plan and your earnings at retirement. If you work in the private sector your options would normally consist of a pension, or a tax-free lump sum and a reduced pension.
If you are working in the public sector your company pension would normally provide a fixed level of pension and an additional tax-free lump sum. Depending on the rules of any particular plan your pension may or may not enlarge in payment.

Early Retirement
In the private sector the majority of company pension plans allow members to retire early from the age of 50 onwards with the employer’s and/or trustees’ consent Many plans allow members to retire due to ill-health at any age.