The Cost of DelayEugene RafteryPenPro email eraftery@penpro.ie14 Priory Hall Landline 01 2000100Stillorgan Mobile 087 1229095Co. Dublin

Deferred Income

Income you put off earning today in order to have income later when you have retired and are no longer working

The need to enhance any State Pension entitlements

To claim Tax Relief today

To get growth on your and the Taxman's money without paying DIRT

To build up a pot of money. You and the Taxman

What is a Pension?

Currently €11,975 pa €230.30 pw With dependent adult €22,703 pw *

Based on having paid PRSI contributions. (Correct number and correct type)

* Means tested

State ContributoryOld Age Pension

Drop in income if relying solely on State Pension pensions

€40,000

If Single €11,975

If Dependent Spouse€22,703

Current Income

€50,000 €60,000

70%

77%80%

45%

56%

63%

The cost of delaypensions

Replacing your income - % of salary needed

Target of 2/3 salary @ age 65

AgeNow 25 30 35 40 45 50 55 65

19%24%

32%43%

62%

102%

15%

Age when starting Pension Pension as a Percentage of Salary

30 36%

40 24%

50 13%

60 4%

The earlier you start

Pension produced by a 20% Contribution

30

LIF

E E

XP

EC

TA

NC

Y

Fromage 60

Fromage 65

Fromage 70

MAL

E

22 years

18 years

14 years

5 10 15 20 250

It’s just for a few years, isn’t it?pensions

People are living much longer in retirement

27 years

22 years

18 years

FEMALE

Full Income Tax Relief

Relief either at 41% or 20% Depends on your rate of tax

Gross Pension Contribution:

€100 €100

Tax relief: €41 €20

What it costs you: €59 €80

Tax Relief

Manual Pension Payment €4000

Tax Rebate/Credit €1,640 @41%

€800 @20%

Tax Relief

If you pay through Payroll Tax Relief can be granted at source.

Pension can also be paid manually

31st October is end of previous tax year

Claim back/offset tax from last year

How do I pay

20% Tax Cut Off points

Single Person €32,800

Married – One income €41,800 Married – Two Incomes (€65,600)

Bigger earning spouse €41,800 Lower earning spouse €23,800

Married – Two incomes similar €32,800 each (same as single person)

What Tax do I pay ?

Age % of Gross Earnings

Up to age 30 15% 30 – 39 20% 40 – 49 25% 50 – 54 30% 55 – 59 35% Over 60 40%

Maximum Revenue Salary €115,000 If pension benefits more than €65,000 pa no relief

Pension Contribution Limits

Company Pension Plan Set Up Under Trust Employer & Employee Contributions Can be used to provide Life Assurance Cover for staff

Personal Pension Plan Personal Pension

PRSA Very similar Personal Pension Very portable Employer & Employee can contribute into Designed by Government Employees must have access to one if they want Employer must have a designated PRSA Provider

Types of Pension Plans

Tax Free Cash (Currently €200,000 limit)

If set up under a Company Plan 1.5 times salary (Subject to service)

If set up under a Personal Pension/PRSA 25% of fund

Balance of fund used to buy a Pension or transfer to an ARF

What happens when I retire

Pension Rates

Female age 65 4.61% Male age 65 4.95%

If you had pension fund of €100,000(Your contributions, tax relief and growth)

◦ Female Pension €4,610 pa €88 per week◦ Male Pension €4,950 pa €95 per week

Buying a Pension

An ARF means you do not buy a Pension

You retain ownership of the Fund

It can be inherited

No Dirt Tax while in the ARF

You pay normal Income Tax and USC upon drawdown, same as pension income

Approved Retirement Fund

Life Assurance paid under a pension plan can get tax relief on cost of cover

Life Assurance through your Pension

Insures your salary if unable to work due to accident or illness

Guarantee a percentage of salary up to 75%

The cost is allowed for Tax Relief

Income Protection

Age 30 next birthday◦ Benefit €20,000 pa, €384pw €3.81pw

Age 35 next birthday◦ Benefit €25,000 pa, €480pw €5.48pw

Age 45 next Birthday◦ Benefit €35,000 pa, €673pw €10.89pw

Payable after 26 weeks to age 60

Income Protection Benefits and Costs

Thank you and any questions?

Eugene Raftery

PenPro email eraftery@penpro.ieLandline 01 2000100Mobile 087 1229095

14 Priory HallStillorganCo. Dublin