Now that you’re in the final stretch before retirement, it’s a good idea to meet with a financial advisor annually to start getting a clear idea of what your financial circumstances are likely to be when you retire.
Countdown Checklist – 2 to 5 years from retirement
- When can I retire? Check the rules of your pension plan to determine the date from which you can choose to retire. If you want to retire early you could have a number of years before you are eligible for the State Pension. You may need to bridge this gap by topping-up your pension now.
- What level of pension and tax free lump sum can I currently expect at retirement?
- What benefits, if any, will I receive from my employer at retirement?
- Will this income be enough to sustain my current standard of living in retirement?
- Will I have enough money to last me for up to 20 or 30 years in retirement? How do I maximise my retirement fund? Depending on your age, you can save up to 40% of your income into a pension and claim full tax relief.
- What portion of my pension pot is tax free and what is taxed?
- What options are available to me in how I can take my retirement benefits?
- Do I need to provide for an income in retirement for my spouse too? In the event of your death in retirement, do you need to provide an income in retirement for your spouse? Do you need to make additional pension preparations now to fund for these extra needs?
- Am I invested in the right pension fund for how I plan to take my benefits at retirement? Now is also a good time to review your fund choice, especially if you are considering opting for an Approved Retirement Fund (ARF) at retirement.
Countdown Checklist – 1 year from Retirement
- Meet with your financial advisor to start planning the financial aspects of your retirement.
- Am I invested in the right pension fund for how I plan to take my benefits at retirement?
- What is my expected Annual Retirement Budget? Include your expected annual pension income after tax and other deductions. Estimate your expected outgoings and expenses in retirement. Factor in the potential cost of long-term health care for you or your spouse.
If the lifestyle you want in retirement will cost more than you expect, you may need to consider continuing to work part-time, reducing your expenses, or postponing your retirement date to meet your goals.
Countdown Checklist – 3 to 6 months from Retirement
- Meet with your financial advisor to get advice on your retirement income and how to best set this up to give you a regular income or remain invested so that you can pass the balance of your retirement fund to your dependants.
- Contact your local Social Welfare office to advise them of your retirement date and obtain the necessary forms you will need to complete to avail of your benefits.
- My Pension Fund – your financial advisor will outline the options available to you at retirement. It’s important to start thinking about these now, so you can choose the option that best suits your needs and financial circumstances.
For example, would you prefer a secure regular income or a fund from which you can withdraw money as and when you need it and pass on to your dependants after you die? How do you plan on using your retirement tax-free lump sum, to clearing debt or save for your future needs?
Company Directors: Avail of an amazing tax saving opportunity whilst also funding for your retirement– currently your company could pay up to 4 times your salary tax-free into your pension, every year until retirement.*
So now is the time to meet with a financial advisor, to weigh up your options with regard to your retirement.
* Based on a married male age 55, retiring at age 60, and provided he has no other pension benefits. Applies only to Executive Pension Plans.
Terms and conditions apply. It is important to note that tax relief is not automatically granted. You must apply to and satisfy Revenue requirements. Revenue limits, terms and conditions apply. Your benefits at retirement may be subject to tax. The information set out is based on our understanding of intended legislation and Revenue practice as at March 2012.
Warning: The value of your investment may go down as well as up.