Are you self-employed or a PAYE employee in a company, which has no Employee Benefits Scheme in place? If so read on…

There are two types of products,which you can avail of in this instance. Firstly you can effect a personal pension or secondly you can put a personal retirement savings account (PRSA) in place.

They are both very tax efficient ways of saving money for your retirement. Premiums paid are tax-deductible. Your funds grow in a totally tax-free environment and you can take 25% of your fund tax-free on retirement.

There are a lot of Pension products in the market place under both headings. We, at Wintrust aim to suggest the product, which best suits your personal needs. We follow a specific process as follows:
  • An impartial review is carried out on any existing arrangements
  • A plan of action is suggested for your retirement income. This incorporates:
    • Your required income at retirement
    • Your required life cover and income protection cover
    • Your Age Profile
    • Your Risk Philosophy on Investment
    • Your Personal Tax Planning

  • Yearly Review of your Pension plan. Pensions should be treated as an on-going process and not just a once-off transaction
  • We keep our clients up to date on all new Pension legislation, which effects them personally
  • All charges and commissions are openly discussed

Example:

Client A is 30 next birthday. He is a software engineer and his current salary is EUR40,000 per annum. His tax rate is 42%. His preferred retirement age is 60. Client A contributes EUR200 per month towards a Personal Pension Plan. This amount increases by 5% per annum to keep it in line with inflation. His net cost towards this Pension after tax is EUR116 per month. His projected values are as follows:


Estimated Final Salary(increasing @ 5% per annum) EUR172,878 per annum
Estimated Fund @ retirement assuming 8% per annum growth EUR390,085
Estimated Fund @ retirement assuming 10% per annum growth EUR538,940


Client A can, if he so wishes include Life Cover and Income Protection in this plan also and gain tax relief from these premiums also.

I mentioned Personal Retirement Savings Accounts (PRSA) above. This is a type of savings plan, the specific aim being to fund for your retirement. There are a number of differences between PRSAs and Personal Pensions. As a part of our advisory service, Winrust will ascertain whether a Personal Pension or PRSA will best suit your needs.