There are a few smart tactics to be considered to keep pension plans on track, depending on the types of pensions an individual may hold and where they are in their life cycle.
1. Make the most of your tax relief
If you are a higher rate of tax payer you should contribute as much as you can afford to avail of tax relief at 40% (2015 rate) subject to the maximum age related contribution limits.
2. Use the October 31st deadline
Individuals are entitled to make either a Personal Pension Plan (RAC: Retirement Annuity Contract), PRSA (Personal Retirement Savings Account) or AVC (Additional Voluntary Contributions) payment before October 31st and backdate this against their 2014 earnings. For those who pay and file their return online under Revenue’s On-line Service (ROS) the deadline is extended to 12th November 2015. This could potentially reduce your tax liability for 2014. (See table above for a breakdown of the maximum allow limits).
3. Consider your risk profile
When you are younger you can afford to adopt a higher level of risk as you are investing for the longer term. As you get older you should consider reducing your level of risk so that you have some element of certainty over your pension pot in retirement.
4. Tidy up your existing pensions
Many individuals change employment on a number of occasions during their working lifetime. As a result they may have more than one pension account. It may be worthwhile reviewing other pension arrangements to make it easier for you to keep an eye on the value of your total retirement savings, in addition to having an investment strategy that you are happy with.
5. Be aware of fees and charges
Charges can have a big impact on the overall pension fund value that you have upon reaching retirement. You should consider reviewing these fees and charges to ensure that you are receiving a competitive charging structure that is consistent across the market place.
Please feel free to use the comments below or you can email our Pension expert Stephen Hamilton at stephen@mortgageline.ie if you would like smart pension advice.
**The above article was written by Davy Select, The online platform for pensions and investments.** Ask us about how Davy Select might be the right home for your pensions and investments.
