Earlier the better when it comes to starting a pension
Good habits around financial planning pay long-term dividends.
Life expectancy in this part of the world has increased significantly over the past 50 years and with it the importance of adequate private pension provisions.Â
We are now expected to live to an average age of 84 so the need to build up a bigger private pension pot is greater than ever.
With the maximum Contributory State Pension, (that is if you are even entitled to it) standing at €12,900 per annum, for many this could mean a big drop in income when you do retire.
 Currently, the qualifying age for the state pension is 66 but is set rise to 67 in 2021 and is expected to increase again to 68 by 2028.
 If your goal is to have a retirement income to supplement the state pension or better still, if you wish to retire before you are in your late 60s, then it is important that you get started with your retirement planning process sooner rather than later.
While it is never too late to begin contributing to a pension, to put it simply, those who begin contributing to a pension early will have a better retirement income than those who put retirement planning on the long finger.
The pension is an extremely tax-efficient savings vehicle, some of the key tax benefits are as follows:
 If you were to contribute €100 to a pension, you will receive tax relief at 20%, so it will have a net cost of €80. If you are a higher rate taxpayer, the tax relief is at 40%, so a contribution of €100 into your plan would cost you just €60.
 Contributions invested into your pension are allowed to grow tax-free which is of great benefit when compared to the alternative where savings & investments have taxation on any gains at a rate of 41%.
 When it comes time to retire and draw down on your pension, you will be entitled to take 25% of your fund, to a maximum of €200,000 as a tax-free lump sum.
While everybody’s circumstances will be different, the fundamental points remain the same.Â
The earlier you can start saving with a pension the better. It will take pressure off in later years, allowing you to avoid the stressful scenario of having to contribute significant pension sums to make up for lost time.
Be pro-active in your approach and aim to regularly review your pension arrangements, including pensions you may have with previous employers.Â
Get to know how your funds are being invested and where necessary seek advice to determine if the current strategy is the best option to yield the results you desire.
Take responsibility for your future and seek independent financial advice to create a retirement plan that will work for you.Â
Set realistic goals and savings objectives to help you achieve the comfortable standard of living and freedom in retirement you have always dreamed of.
