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Pension-why have you not started yours yet? Retirement–are you on the right track?




Most people, no matter what age like to dream about getting out of the daily grind. As we get older, retirement planning or lack of planning becomes a harsh reality.

For most, retiring, and possibly even retiring early in order to enjoy healthy free time is a life goal, however when it comes to ensuring we have enough funds and income for the glory years, we often put this on the long finger and prioritise other short-term commitments and goals.

Starting contributions early allows your pension time to grow at a manageable pace rather than waiting until the later years and having to contribute more.


Did you know that a 35 year-old starting a pension at €500per month would have built up a fund of €829,006 by the age of 65

Interestingly, a 30 year-old starting a pension of €500 per month would have paid in an extra €33,154 but will have €436,727 more in their fund, a whopping €1,265,733

The shrewd 25 year-old who starts with the same monthly premium of €500 per month gets a fund of €1,893,429 at age 65


· The calculations above assume the contribution increases at 5% per annum once in payment.

· Projections are, by their very nature imprecise as the most important assumption, fund growth, is unknown. In the figures above fund growth is assumed to be 6% after fund management charges have been deducted.

· Charges are allowed for as follows: policy fee €4.50 per month, allocation rate of 100% with no bid offer spread. The policy fee is assumed to increase at 3% per annum.


The above figures are a perfect demonstration of how, when it comes to pension and retirement planning, slow and steady wins the race.


Because Pensions are a long-term product, ongoing advice and direction is vital, you should always engage the services of a Qualified Financial Advisor to meet regularly in order to ensure that you are going to meet your retirement goals.


Some commonly asked questions:


Can my Pension lose money, drop in value?

The answer is yes, because most pensions are invested in funds, we are all familiar with the warning notices “the value of your investment can rise or fall, past performance is not a reliable guide to future performance”.

We all need to take some level of risk with our pension funds in order to achieve growth but the level of risk is totally up to you, in the early years it makes sense to take risk because higher risk funds are much more likely to make higher returns over the long-term but as we reach retirement it is always good advice to reduce your level risk. Before setting up your pension we will go through a ‘risk questionnaire’ to understand your feelings towards risk and seek out funds which suit your risk appetite.


Should I use a Broker for setting up my Pension?

Best advice is to deal with a Financial Broker throughout your entire pension journey; setting up your pension is only phase one of retirement planning, you need to regularly review your pension to ensure you are on target for the income you will require in retirement.

Because of changes in your level of income, promotions, lifestyle changes etc. the level of pension you will require is going to change over time.

Brokers offer consistency of advice; your Broker is educated in Pension Planning and Projections. Along with your Broker you set out a roadmap of where you want to be and receive guidance as to how best to get there.

Regular meetings with a Qualified Financial Advisor are essential in monitoring your pension’s performance and direction.

Brokers attend webinars/seminars regularly so that they are fully informed at all times and will help guide you.


What pitfalls should I watch out for?

Too many people blindly put money into pensions with no ongoing advice and are not aware of where they are on their retirement journey, ongoing regular advice is the key to successfully preparing for retirement.

With the help of your Financial Broker, you can switch between funds as circumstances dictate, regularly amend your contributions to ensure you are on target, make the most of your tax relief entitlements.

Pensions can be technical, there are various types, various options on retirement, tax relief issues, property purchases, this is where it pays to seek the help of a professional


What if I die before I retire, who gets all my pension savings?

In the event of your untimely death the full value of your pension is paid to your estate.


What if I die shortly after I retire?

In all circumstances your pension is protected, most retirees take a Tax-Free Lump Sum at retirement and the remainder is used to provide regular income in retirement. There are several options in retirement and this is where good financial advice is key to your decision-making process.



If you have a pension and want advice on it or, if you have no pension yet but feel that the time is right to start then contact one of our Qualified Financial Advisors today, we will try to address any reservations you might have. First consultations are always free and if you decide to engage us, we will outline all our charges going forward.


Cormac Woods Financial Services Ltd T/A Acorn Financial Services are regulated by the Central Bank of Ireland

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