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Pensions

Pensions

Your retirement may seem like a long way off. Nonetheless it is never too early to start planning for your future: the younger you start planning your pension, the longer you will have to build up a financial fund for your retirement years. Smart planning for your pension can ensure you maintain the standard of living to which you have become accustomed and have enough money to support a comfortable life during retirement.

Euro Wealth Financial recommends that each person plans for their future with regards to their pension. No matter what age you are, planning your pension and making sure it is on the right track should be a priority for building a bright future.

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How does a Pension work?

A pension plan is a long-term investment aimed at helping you set aside money for your retirement. The ultimate value of your pension plan will depend on the contributions you have made over the years and the investment return the funds have achieved in your personal pension plan.

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What is a Personal Pension Plan or Personal Retirement Savings Account (PRSA)

A personal pension plan is a long-term investment aimed at helping you set aside money for your retirement. The ultimate value of your pension plan will depend on the contributions you have made over the years and the investment return the funds have achieved in your personal pension plan.

Personal pension plans are designed for people who don’t have a pension scheme through work and who want to set aside money themselves. In particular, a personal pension plan would suit people who are either self-employed or have no pension through their employment.

How much should I invest in my Personal Pension Plan or Personal Retirement Savings Account (PRSA)?

Before you decide how much you are going to invest in your Personal Pension Plan there are a number of things you need to think about: what age you’d like to retire at, your current age, your existing income and how much you can afford to set aside each month as a pension contribution. Calculate now what you may need to put away for later by using our Pension Calculator.

Please see attached guides to Personal Pensions and Personal Retirement Savings Account (PRSA)

Download A Guide To PRSA

Download A Guide To Personal Pensions

General consensus suggests you should aim to retire on two thirds of your current income (this will include the State Pension). A Personal Pension Plan or PRSA gives you the elligibility to make contributions either monthly, quarterly, every six months or every year. You can also boost your Personal Pension Plan with a lump sum payment at any stage.

You are able to decrease or increase your contributions at any stage, which is useful if you begin to earn more money, or on the other hand, if you are having financial difficulties.

One of our Financial Brokers will talk to you about your expectations for retirement and your personal circumstances. In understanding what you hope to achieve they can offer you helpful advice in deciding on your contribution amount.

Call us Today for a Quote on 01 8958352 / 01 8958498 or email us on info@eurowealthfinancial.ie

Why would I need to use a Financial Broker?

We research the market for you.

Not all Pensions Plans are the same we will take the time to ensure that we match you to the correct pension provider and policy that best suits your needs objectives, personal circumstances and budget. When you decide to do business with us you will receive a statement of suitability letter explaining our recommendation.

We have years of experience and will give you the best advice, We will source the very best performing funds that suit your risk profile.

Choosing the right way to save for retirement and how to take your retirement benefits when the time comes, can be a daunting task. Our Financial Brokers will be able to explain the choices available to you in simple language allowing you to make an informed decision.

Euro Wealth Financial will get to know you, your personal and financial circumstances, your attitude to and capacity for risk – products like Personal Pension Plans , PRSA, Company Pensions, Personal Retirement Bonds, A(M)RF, for example, contain a certain level of risk that you need to be aware of.

Our Financial Brokers will guide you through the process of setting up a Pension Plan and help you to make sense of charges, tax reliefs and benefits options. They will help you develop a well-researched and structured investment strategy for your Pension Plan compatible with your attitude to and capacity for risk and designed to achieve your goals as far as possible. Ultimately, Euro Wealth Financial will ensure you choose the option and product best suited to your needs.

Call us Today for a Quote on 01 8958352 / 01 8958498 or email us on info@eurowealthfinancial.ie

What are the tax advantages of a Personal Pension Plan or Personal Retirement Savings Account (PRSA)

This Pension calculator shows the effect of tax relief on your pension contribution.

This Pensions Contribution Calculator was provided courtesy of Zurich Life

Age in year Maximum tax deductible contributions as a % of your earnings (max €115,000 earnings)
29 or younger 15%
30 to 39 20%
40 to 49 25%
50 to 54 30%
55 to 59 35%
60 or more 40%

In addition, the growth achieved by your Personal Pension Plan or PRSA is not subject to tax. This means that you gain from any investment growth and income your PPP earns.

Remember: Make sure you understand the tax benefits of a Personal Pension Plan or a PRSA and that you apply to the Revenue Commissioners for these benefits. This is something your Euro Wealth Financial Broker can help you with.

Pension Investment Tax Deadline for Self Assessment Tax Return 2017 31st of October and 14th of November

Individuals who both pay and le their tax returns through the Revenue On-line Service (ROS) have until Tuesday 14th November 2017 to pay a pension contribution and elect to backdate the income tax relief against the 2016 tax year. Those who do not qualify for the ROS extension must do this by 31st October 2017.

There is no option to defer. If they do not take this opportunity, they will not get another chance to reduce their 2016 income tax liability.

WHO FILES A SELF-ASSESSMENT TAX RETURN?

The self-employed, proprietary directors (those who own more than 15% of a company) and people with non-PAYE income are required to le self-assessment tax returns under the Pay and File system with Revenue. Employees and directors in occupational pension schemes can also reduce their 2016 tax bill if they pay an AVC single premium on or before 31st October 2017 and file a return by 31st October 2017.

FILING RETURNS ELECTRONICALLY

Certain individuals are required to file their tax returns electronically through the Revenue Online Service (ROS) system.
These include self-assessed individuals claiming income tax relief on personal pension, Personal Retirement Savings Account (PRSA), Additional Voluntary Contribution (AVC) contributions as well as those claiming other reliefs such as artists’ exemption, woodlands exemption, patent income exemption etc. Those effected should ensure they are registered for ROS so they can claim all reliefs they are entitled to.

BACKDATING INCOME TAX RELIEF

A self-employed client who wants to pay a personal pension or PRSA contribution and backdate the income tax relief against their 2016 earnings needs to do the following:

1. Pay the contribution to the life o ce or PRSA provider on or before the return ling date, and
2. Submit their tax return to Revenue on or before the return ling date

The return filing date is 14th November 2017 for those who pay and le their returns using ROS. If there is any doubt about qualifying for the ROS extension we would recommend clients pay their pension contributions and le their tax return by 31st October to ensure they meet the deadline.

CLAIMING INCOME TAX RELIEF ON PERSONAL PENSION OR PRSA CONTRIBUTIONS

In order to claim income tax relief on contributions to a personal pension or PRSA the individual must be “chargeable to tax in respect of relevant earnings”. Relevant earnings refer to income of individuals who are:

Age: 30 - 39 40 - 49 50 - 59 60 - 68
Maximum annual income allowed: €115,000 €115,000 €115,000 €115,000
Maximum annual pension contribution: €23,000 €28,750 €34,500 €46,000
Tax saving: €9,200 €11,500 €13,800 €18,400
Self-employed

(income from a trade or profession taxed under Schedule D, Case I or II)

Employees

(Schedule E, PAYE and not a member of a company pension scheme)

Directors of companies

(Schedule E, PAYE and not a member of a company pension scheme)

Self Employed backdating Tax Relief for Pension Investment

Must pay and elect
to backdate pension contribution by
31st October 2017 for 2016 tax year.Extension to 14th November 2017 for those who pay and le using ROS.

Self Employed and Proprietary Directors (more than 15%) need to complete Income Tax Form 11 or the shorter version Form 11E.

Clients should not include Retirement Annuity Contract (RAC) or PRSA Certi cates with their self-assessment tax return. Clients should instead retain supporting documents, accounts, certi cates, etc. in case they are requested by Revenue as part of an audit at a later date.

Self employed and Proprietary directors will have to file their returns using ROS if they are looking to claim income tax relief on pension contributions. See www.revenue.ie for more information.

Can employees avail of the tax deadline

Employees also have the opportunity to pay a pension contribution and set it against their 2016 tax bill. To claim income tax relief on their pension contribution, employees must pay their contribution to the appropriate pension contract for their circumstances.

PRSA or Personal Pension: where the employee had Schedule E income during 2016 but was not a member of their employer’s company pension scheme.

AVC or PRSA AVC: where the employee had Schedule E income during 2016, was a member of their employer’s company pension scheme during 2016 and is still in that same employment. Once an employee leaves employment where they were a member of a company pension scheme, they cannot make any further pension contributions in respect of the income from that employment. 
Note: a termination payment made on leaving employment (under Section 123 TCA 1997) is not considered remuneration for pension purposes. This would include termination payments on redundancy, payment in lieu of notice and other ex-gratia payments. However, part or all of such a termination payment may qualify for tax relief under other available exemptions.

BACKDATING INCOME TAX RELIEF An employee has until 31st October 2017 to:

Pay their pension contribution to the appropriate pension contract (see above), and

Send their tax return to Revenue, electing to backdate the pension contribution to 2016 tax year

Where an employee elects to backdate a contribution to a previous tax year they need to ensure that relief has not already been given in the current tax year. Where the contribution is paid through payroll under the net pay arrangement income tax relief is automatic and is given in the current tax year.

DATE TO MAKE A CLAIM

Must elect to backdate pension contribution by 31st October 2017 for 2016 tax year.

PAYE employees who are required by Revenue to le a Form 12 for 2016 can opt to le online in which case they have until 14th November 2017 to pay their pension contribution and submit their tax return.

FORMS REQUIRED TO MAKE A CLAIM

PAYE Employees (including non-proprietary directors) need to complete Income Tax Form 12. This can also be done online through myAccount or by their tax agents through ROS.

Employees who have more than €30,000 gross non-PAYE income and more than €5,000 net non-PAYE income should submit a Form 11 instead of a Form 12.

RAC, PRSA or PRSA AVC Certi cates should not be included with their tax return. Instead supporting documents, accounts, certi cates, etc. should be kept in case they are requested by Revenue as part of an audit at a later date.

HOW TO MAKE A CLAIM

PAYE Employees not filing online should send their income tax form to their local Revenue office.

The Pension Tax deadline for employees who have left employment

See www.revenue.ie for more information.

Call us Today for a Quote on 01 8958352 / 01 8958498 or email us on info@eurowealthfinancial.ie

How do I decide where to invest my Pension Plan?

You may be relying on your Pension Plan to provide an important source of income in retirement, so it’s vital that you invest it wisely. There are many options available to you, from low and high risk funds investing in particular types of assets to managed or mixed funds investing in a spread of assets and self-directed funds where you choose the funds or assets in which you invest.

The Pension Plan you decide to invest in should offer you a diversified range of investment options that can meet your changing circumstances over time.

Any choice you make should be based on the level of investment risk you are comfortable with and should take into account your financial circumstances and goals. It is important to understand that the value of your Pension Plan can fall as well as rise, depending on which funds or assets you invest in.

Euro Wealth Financial will help and guide you with your investment choice?

Euro Wealth Financial will get to know you, your financial needs, attitudes to and capacity for investment risk by using an Investment Suitability tool

www.friendsfirst.ie/fund-centre/investment-suitability/

We will guide you through the basic elements of investing – risk and return, diversification and your own attitude to risk – and ensure you understand what’s at stake. We will always recommend Multi Asset Funds for your Pension.

How funds work

Zurich

Your Euro Wealth Financial Broker will get to know you, your financial needs, attitudes to and capacity for investment risk by using an Investment Suitability tool www.friendsfirst.ie/fund-centre/investment-suitability/. We will guide you through the basic elements of investing – risk and return, diversification and your own attitude to risk – and ensure you understand what’s at stake. We will always recommend Multi Asset Funds for your Pension.

Friends First Portfolio Funds

Friends First Concept K Fund

Friends First Magnet Absolute Fund

Aviva understanding Multi Asset Funds.

www.aviva.ie/broker/broker-funds/multi-asset-funds/

Aviva Investors Multi Asset (AIMS) Target Return Fund

www.aviva.ie/broker/broker-funds/avivainvestorsmulti-strategyaimstargetreturn/

Merrion Multi Asset Funds

www.aviva.ie/broker/broker-funds/multi-asset-funds/merrion-multi-asset/

Legal and General Multi Index Funds

www.aviva.ie/broker/broker-funds/multi-asset-funds/l&g-multi-index/

New Ireland Multi Asset Funds

Irish Life Multi Asset Funds

Call us Today for a Quote on 01 8958352 / 01 8958498 or email us on info@eurowealthfinancial.ie

Post Retirement Options

What Happens when you retire?

From the age of 60 onwards you can access your Personal Pension Plan or PRSA You can also access your Personal Pension Plan on ill health retirement at any age. The value of your Personal Pension Plan is payable in full to your estate if you die before drawing on your benefits.

A Guide to your Retirement Options at Retirement

You will have a number of options when it comes to taking your retirement benefits from your Personal Pension. You can take a lump sum of up to 25% of your fund subject to the following limits:

Lump sum amount (25% of fund) Rate of tax
Up to €200,000 Tax free
Next €300,000 Standard rate (currently 20%)
€500,001 and over Marginal rate (currently 40%) plus PRSI and USC

These days, the average person retiring at age 65 can expect to live for at least another 20 years or more. Making the most of these retirement years involves careful financial planning. The first part of this is choosing the right pension plan. The second part is choosing the right post-retirement options for your needs.

With the balance of your Personal Pension Plan you can choose to:

The following are your post-retirement options:

Approved Retirement Funds (ARF)

An ARF allows you to invest some or all of your maturing retirement fund into a variety of fund’s from leading Life Assurance companies. The ARF allows you to invest in funds which fit your investor profile and you access to your capital.

Approved Minimum Retirement Fund (AMRF)

An AMRF is similar to an ARF but has some compulsory requirements that are intended to safeguard a portion of your retirement fund. These requirements are removed on your 75th birthday because an AMRF automatically becomes an ARF.

Annuities

The traditional option upon retirement was to take a tax-free lump sum from your retirement fund and purchase an Annuity with the balance. The Annuity can offer you a guaranteed regular pension income for the rest of your life. Euro Wealth Financial can offer Post-Retirement plans from leading Pension Providers. Euro Wealth Financial can provide you with information and advice about post-retirement options.

Download Financial Planning Guide For a Approved Retirement Fund AMRF

Download Guide For a Approved Retirement Fund AMRF

Download Guide to Annuities

ARF or Annuity Tool.

 

 

Company Owners, Directors and Executive Pensions

View our Executive Pensions Newsletter

View A Guide To Executive Pensions to download

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Company Pensions

View our Company Pensions Brochure

Call us Today for a Quote on 01 8958352 / 01 8958498 or email us on info@eurowealthfinancial.ie

Top up your Group Company Pension Plan

View our Group Company Pensions Brochure

Call us Today for a Quote on 01 8958352 / 01 8958498 or email us on info@eurowealthfinancial.ie

PENSION RETIREMENT BOND

When people move from job to job many of them leave their pension behind them in their old company’s pension scheme. Keeping track of different company pension schemes can be hard, and you might have very little say in how a scheme is managed once you have moved to new employment. A Pension Retirement Bond (Buy- out Bond) is a personal Pension Bond into which you can place the pension fund you built up with former employers.

The advantages of moving your fund to a Pension Retirement Bond is that you can keep a closer eye on how it is doing and also decide for yourself where and how it is invested.
Keep your pension on track with our Pension Retirement Bond. Euro Wealth Financial can advise you on a Pension Retirement Bond plan which allows access to the following key benefits:

(1) Facilitates transfer from one Pension Scheme to another Pension Scheme.
(2) You can choose from a wide variety of Investment Funds from different fund managers.

View our Guide To buy out Bonds to download

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

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