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In your 40s? It’s time to get serious about Pensions.

If you’re in your 40s and haven’t begun putting away part of your income for retirement you may have some catching up to do. That requires thinking about how today’s income is being allocated. The good news is that help is on hand. There are lots of tax saving benefits when saving for your retirement.

And if you have started a pension already, the chances are you haven’t reviewed it recently. If your circumstances have changed now is the time to take action and review your retirement plans.

One more reason to start saving today

Currently one of the best things about saving for your retirement is the generous tax relief available, up to 41% for a higher rate tax payer.

Did you know?

If you’re in your 40s, you can save up to 25% of your income into a pension and claim full tax relief.*

*It is important to note that tax relief is not automatically granted; you must apply to and satisfy Revenue requirements. Revenue terms and conditions apply.

So how much should I save now for my retirement?

This depends on a number of factors such as:

- Your age now

- When you’d like to retire

- What kind of lifestyle you’d like to have in retirement

- Any pension arrangements you already have in place (from previous or current employers)

- How much you can afford (bearing in mind that current tax relief can effectively can cut the cost of your monthly savings by almost half).

Did you know?

Depending on your particular pension product you can usually start and stop pension contributions in line with your affordability. Don’t be afraid to start a pension because it feels like a life long commitment. If your financial circumstances should subsequently change you can talk to your financial adviser about adjusting or suspending your pension contributions accordingly.

The half your age rule

Generally, you should be saving about half of your current age as a percentage of your income. In other words, if you’re 40 years old, you should be saving 20% of your annual income. For someone earning €60,000 that’s about €1,000 a month but could actually only cost you €590 after tax relief*.

You can start small and gradually increase your savings when you can afford  to. Every little bit adds up, especially when you consider it has a good chance to grow, for 20 years or more.

*Assuming higher rate taxpayer 41%. It is important to note that tax relief is not automatically granted; you must apply to and satisfy Revenue requirements. Revenue terms and conditions apply.

If you would like to discuss starting a pension or reviewing your existing pension please get in touch with us on (0404) 67123. 

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