How to prepare as your retirement gets closer

The best place to start is to sit down with a financial broker who will look at all the options available to you.

If you’ve saved into pensions with several employers over your working life, for each private pension that you have, you’ll need to find out who the administrators are, get their contact details, make sure the administrators have your up-to-date contact details and check where the pension scheme is.

Bear in mind that it can sometimes be difficult to trace old pensions, particularly if you’re no longer working with the company that offered that pension. Contact the Pensions Authority if you have difficulty tracing your pension, as it keeps a register of company schemes. You might also find it helpful to ask former colleagues who also worked with the employer if they have the contact details of the administrators.

You’ll also need to determine the best way to draw down your pension. When you retire, you can usually take part of your pension fund as a tax-free lump sum. The amount depends on the type of pension policy you have and how much you have taken in tax-free lump sums from other pension plans.

With defined benefit (DB) schemes, the pension you get on retirement is based on your years of service, your salary and the overall solvency of the pension scheme. DB scheme benefits are not guaranteed. If the scheme's assets are not sufficient to pay the benefits, and the employer is not able to meet the shortfall, the pension you had originally expected or been promised may have to be reduced. 

So it’s important to find out if there’s a shortfall in your DB scheme. You can do this by checking the scheme’s annual report, as this will include a copy of the latest actuarial valuation, which sets out the funding position of the scheme.

With defined contribution (DC) schemes, the value of your pension depends on how much you and your employer (if it chooses to do so) pay into the pension scheme over your working life and how well that money is invested.

Check too if you’re eligible for a state pension and if so, how much. The maximum weekly contributory state pension is now €289.30 at age 66. Your social insurance record will largely determine if you qualify for the full amount. 

Check this record and make sure all of your time in the workforce has been correctly recorded. If you find that there is no record of social insurance contributions for a period of time when you were in the workforce, point this out to the Department of Social Protection and provide evidence to prove that you did, in fact, work at that point.

The best place to start is to sit down with a financial broker who will look at all the options available to you and work with you to implement a strategy that best suits your retirement needs.