Why is everyone talking about pensions?

Perhaps you started to wonder, or perhaps you had far better things to be thinking about instead, but you might have noticed recently that there is an awful lot of attention being given to pensions.  Newspapers are highlighting stories; the pensions authority is running ads on Newstalk about employer’s responsibilities when it comes to providing pension access for staff and each and every pension provider is advertising through every medium they can find to highlight the value in paying into a pension product.

So why all the noise?

Well, 2 reasons really. The first is that this is what’s known in the industry as pension season. The time of the year where employed individuals and self-employed workers can write a cheque to their pension and write it off against 2015’s tax bill. An excellent and simple method of making a sensible financial planning decision that saves a good slice of tax while you are at it. For those who would like to do this, assuming you complete your returns online, you have about 10 more days to get this submitted so if you want to understand the tax benefits and are still considering putting a lump sum away for your retirement please get in touch with us asap. We can assist in getting this done for you in time.

The second reason and probably the more logical reason is that this deadline tends to bring the discussion about pensions back into the spotlight and with good reason. Allow me highlight a few simple points.

In Ireland today there are 5 people working for every 1 that is retired. In 25 years’ from now there will be 2 people working in Ireland for every 1 that is retired. A massive increase in retirees.

The social welfare pension is amongst the highest in the EU and couldn’t be maintained at its current levels in years to come considering point 1 above.

Our debt levels per head of population are amongst the highest in the EU.

Life expectancy is continuing to rise.

State pension age is continuing to rise.

Costs of living are continuing to rise.

The cost of health care continues to rise.

Pensions are optional.

The simple reality is that we all must start to believe that pensions, complicated as they can be, are a now an absolute must. Like any savings habit, just get started. Take the plunge. I have never met anyone ever, who was upset they had arrived close to retirement with a pot of cash. The only regret I ever hear from clients is that they wish they had more, and they wish they had started earlier.

Please take note when I say that the tax relief available is generous, the state can only be responsible for providing so much for you in your years to come and you won’t regret it. In fact, once you start saving you’ll probably quite enjoy it.

And please always remember it’s never too late and please don’t put this decision on the long finger. Having money when you go on the longest holiday of your life is surely something that has to be considered a necessity.

Get in touch with Nick Lawlor today on 01 531 0571 or nick.lawlor@newbeginning.ie to start your retirement planning today.

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