Investing for Retirement

Investment Options for Retirement Financial Planning 

Investing for retirement requires your regular attention, and review of your pension and other sources of retirement income.  

Retirement Financial Planning

Over the years 2008 - 2009, falling stock markets and property values seriously eroded wealth, raising concerns among the millions of baby boomers, who were well into their middle age, about their individual retirement accounts and planning for retirement.

Many companies are switching from defined benefit
 pension schemes, to defined contribution, or have closed the defined benefit scheme to new entrants. Most defined benefit schemes are based on final salary, whereas the pension from a defined contribution scheme depends on how much is paid into the scheme and the investment returns achieved. Defined contribution schemes transfer the investment risk to the employee and require them to take a more active interest in the pension fund performance.

How safe is your pension?

  • Ask questions of your employer and financial advisor. 
  • Know your scheme and know your rights. 
  • Pay attention to your financial affairs.
  • Take an active interest. If you don’t, why should anyone else?

The main sources of income in retirement are:

  • Pension from employer-AVCs, PRSA, or retirement jobs provide a second line of defense should your employer scheme run into difficulty. 
  • Additional Voluntary Contributions (AVCs) to secure additional benefits. 
  • Tax relief is available on contributions. 
  • Personal Retirement Savings Account (PRSA) 
  • An Approved Retirement Fund (ARF) for the self employed and proprietary directors, or small business retirement plans. 
  • State Pension 

At retirement the following pension options may be available:

  • Tax free lump sum, plus reduced pension 
  • Purchase annuity-insurance company provides guaranteed income for life, on payment of a single premium 
  • Invest in ARF:  An Approved Retirement Fund is a personal retirement fund where you can keep your money invested after retirement, as a lump sum. 
  • Take taxed cash lump sum

Investing for retirement

Please consult your employer/pension provider/financial advisor to discuss  the options available and suitable for your particular circumstances. 

Read also Retirement Financial Planning for more information on investing for retirement

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