Author: Gerard

Savings Vs Pensions

Why should a person save to a pension instead of a savings account and vice versa? There is an argument for both cases but I will briefly outline some essential differences here.   Savings Account/Policy These are usually for a shorter term than pensions. The money saved is usually accessible either on the spot or within a few days of request. However, beware of early encashment penalties on some accounts or policies. Savings accounts or savings policies tend to be better options for short to medium term goals, for example, children’s education costs, a new car, a deposit for...

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Reducing Investment Risk

In a world of low to zero interest deposit accounts and few capital secure investment options, from the outside it appears not to be a good time for the low risk investor. However, this is not necessarily true. Many people, when they think about investing, automatically envision large scale and high-risk products that are completely out of sync with their needs in terms of capital preservation or growth. This does not need to be the case!   Investments are generally risk rated on a scale of 1 to 7 with 1 representing the lowest possible risk and 7 being...

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Options When Leaving Pensionable Employment

If you change jobs and move to a new employer, you may be leaving a pension scheme with your previous employer. What you may not know is that upon leaving, you have a number of options regarding this pension, known as a retained benefit. The main ones are as follows:   Leave it as is One option involves doing nothing and leaving your pension as is. It will continue to be invested in line with the scheme strategy and you may be able to take benefits from the age of 50 onwards (see below). However, there are a number...

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Serious Illness Cover Vs Income Protection

In my line of work, I am often asked ‘which am I better off having, income protection or serious illness cover?’. This can be a difficult decision to make in terms of what is best for a person as although there are similarities between the two, they are uniquely different types of policy.   Income protection (also called Permanent Health Insurance or PHI) is a policy that will pay you an income in the event of you being unable to work due to illness or injury. Premiums (up to a certain limit) are tax deductible and one can usually...

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Will My Private Pension Affect My State Pension?

To answer this question, you must first find out what type of State Pension you will become entitled to when you reach pensionable age. There are two types: Contributory Non-Contributory   In order to qualify for the maximum State Pension (Contributory) you must have made a certain level of PRSI contributions* in the past. Should you not qualify for the maximum level of the State Pension you may still qualify for a reduced level of it. This pension is not means tested, therefore any private pension or other wealth you may have will not affect it.   However, any...

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