George Nolan, Pension Specialist with New Ireland Assurance

Pensions and financial planning in general may not be the most uplifting of topics but, every once in a while, it makes sense to put some time aside and see if your financial plans are on track.
On track for what you might ask? Financial Planning is all about managing today’s income in the smartest way possible, allowing you to live the life you want today, but also putting something aside for your future so you can enjoy your later years. Of course, for many people retirement seems a long way off so we tend to put it to the back of our minds. We also understandably let our busy lives get in the way, and in many instances, have not yet put aside the time to start planning for our retirement.
Good News
Now there’s good news and there’s bad news when it comes to retirement planning. The good news is that the government has put a range of incentives in place to encourage you to save into your pension plan. For example, with a Personal Pension you can benefit from generous tax relief of up to 40% on your pension contributions (assuming you pay income tax at the higher rate). The bad news is that if you don’t take on the responsibility of planning for your future, it’s unlikely anyone else will.
When you retire, you’ll probably assume that you will have the same standard of living. However, unless you put a pension plan in place, your income could drop by almost 70% in retirement. The State Pension (Contributory) is currently €12,652 a year (€243.30 a week), but the average wage is €38,594*. You need to start saving for your retirement to help avoid a big drop in income and the impact this would have on your lifestyle. (*Source: CSO, Average earnings in Q I 2018, Earning and Labour Costs May 2018).
Savings Plan
You may need an income for up to 30 years or more after you retire. People are living longer, which means you may be retired for up to a third of your life. That’s why it’s so important to have a savings plan that ensures the money you earn during your working life lasts your whole life. Your pension plan is one is one of the most important savings plans you will ever save into. It can provide you with an ongoing income to ensure you have the money you need to enjoy your retirement years.
Finally, don’t over rely on the State Pension. If you qualify for the State Pension, you could be 60 before you receive it. The age of eligibility for the State Pension (Contributory) has changed and no longer starts at age 65. If you were born on or after 1 January 1961, the minimum qualifying State Pension age will be 68. That’s potentially a three-year gap in retirement income. The estimated shortfall in retirement income over three years is €37,956, due to the change in the minimum qualifying age for the State Pension (Contributory).
Don’t Wait
What should you do now? Talk to Hegarty Financial Management and review your financial plan. If you’ve not yet established one, don’t wait any longer as your retirement is approaching!
Should you require any further information with regards to financial planning for your future, please contact our office on 01 4972544 or alternatively you can e-mail