A step by step guide to deciding on and achieving a retirement income goal.

Are my pension and retirement savings fit, or do they need a new fitness work out?

The purpose of this exercise is to ensure that your pension savings are adequate to meet your retirement income needs.

If there is a deficit,the sooner you know, the easier it is to fix.

Start with looking at all potential sources of income.

Do you qualify for the state pension?

How much will you receive?

The rules for contributory state pension are relatively complex, and could justify a complete article by themselves.

In for far as you can estimate what rate do you expect to receive on retirement? (in 2014 the rates varied between €92 and €230.30).

The contributory pension is not means tested.

The maximum non contributory pension rate is €219 per week, rising to €229 per week aged 80 ( as at Jan 2014)

The non contributory pension is means tested.

Have you other sources of income which will continue up to and during your retirement?

 Royalties, investments, stocks and shares, a trust fund?

Include everything.

Company and personal pensions.

You can obtain an estimate of the expected annual income from the annual statements given with these pensions.

Trace lost pensions and up date pension forecasts.

What about pensions from previous jobs?

Make a list of them, if necessary. If you were a member of a workplace pension scheme, contact each place of employment and ask what type of pension is it and what provider is it with (unless it is a defined benefits pension).

Did you contribute to personal pensions?

If so, find out who the provider was and ask the questions listed in our pension provider letter download two draft letters here>>

Make the most of your pensions.

Pension lump sums.

As a member of a pension scheme or owner of a pension plan, you should be able to take a tax free lump sum on retirement.

The value of the lump sum can vary in different circumstances, however, it is usually 25%. of the accumulated value of the pension.

Up to €200,000 can be taken tax free in this way.

This can be a significant benefit.

The balance of your pension can be dealt with in the following manner:

• Receive an income or annuity for life. This is the most common.

• Purchase an Approved Retirement Fund or Approved Minimum Retirement Fund

• Take the balance of your pension as taxable cash, in some circumstances.

When you have gathered all of the required information then you can use our pension savings health check worksheet to calculate whether there is a shortfall or not.

Download our pension savings health check worksheet here>>

Setting a clear retirement income goal

It is important to have a clear idea of the income you will need to meet your everyday retirement expenses.

If you don't have a clear goal, how are you going to measure the amount of savings you will need?

You can state the sum as the amount you will need to meet your retirement expenses or you can calculate it as a proportion of your income.

Some schemes use between half to two thirds of salary.

Some of your current expenses may have gone by retirement, e.g. mortgage.

Others may increase, e.g. heating, leisure.

Try to imagine what you will need to live a comfortable life in retirement.

Mind the gap in your pension savings.

How can I increase the value of my pension fund, to provide an adequate retirement income ?

If you are employed, join your employers scheme, if one is provided.

If you are already a member, then you should consider increasing contributions.

Set up your own personal pension plan.

If there is not a shortfall you should look at ways to improve your pension savings performance.

Increase your savings

Claim all your tax relief

Review the way your pension is invested.

Are you paying too much in fees?

The main lesson to learn from all of this is review your pension regularly.

Don't take it for granted.

Treat it with care and attention and it will provide for you in your retirement.

Do take professional advice from qualified experts when planning or reviewing your pension.

For unbiased, independent advice contact one of our experienced experts today.

Use the get a quote button

or telephone 1890 666 666.