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Why take a pension?
Pension Schemes provide a tax-efficient saving system to provide you with an adequate retirement income. The State pension is equal to one third of the national average wage, and is designed to cover only your basic living requirements, not replace your income. With Ireland being a country with an ageing population, there is no guarantee that there will be adequate state funds available to pay out State Pensions in the future.
Tax Relief
The great thing about saving for retirement is that the taxman gives you a really good deal.
- Your contributions into your retirement plan are not taxed. The table below sets out the limits.
- The investment growth that your fund achieves is also free of tax.
- Although you do pay tax on your retirement income, you will get a tax free lump sum that is 25% of your accumulated fund.
Be advised that there is a €115,000 salary cap on these percentages.
For example, if you are 42 and your net salary is €50,000, you would be able to contribute 25% of this amount to your pension and get full tax relief of €12,500
Try the Retirement Calculator below to see what kind of monthly retirement income you could be receiving.
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