Author: Gerard

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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Section 72 Life Cover

Section 72 life cover is a type of policy designed for those who may be leaving substantial inheritances to (in the main) children on their death. Large inheritances can lead to issues for the beneficiaries as they may be left with sizeable Capital Acquisitions Tax (CAT) liabilities as a result. In some cases, they may have to sell the property inherited just to pay the tax due.   Currently the tax-free threshold for children is €310,000. Anything above this amount is taxed at 33%. So, for example, if a person left a child a total inheritance worth €1,000,000 the...

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What is an Annuity?

Previously I wrote about your options at retirement and in a bit more depth about one of the options – the ARF/AMRF choice. When maturing your pension, the main alternative to transferring the balance to an ARF or AMRF after taking tax free cash is to invest in an annuity.   An annuity in its simplest form is an income payable for as long as you live. In order to purchase the annuity, you must use some or all of the balance of your pension fund after taking tax free cash and the transaction is non-reversible ie. the money...

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