Understanding Your Pension Brought to you by Cornmarket’s Retirement Planning Service Cornmarket Group Financial Services Ltd. is regulated by the Central Bank of Ireland. A member of the Irish Life Group Ltd. which is part of the Great-West Lifeco Group of companies.
Our dedicated retirement experts are with you Before At In Retirement Retirement Retirement
Will you have enough money for your life in retirement? Better quality Additional Financial of life health costs freedom
Retirement age has increased globally People who are Working Vs Retired France 60 ▶ 62 1950 Ireland 66 ▶ 68 2012 2050 Source: The Economist, 07.04.11, figures have been rounded.
The reality of pensions Retirement age* 60 2019 2028 2021 State Pension age** 66 67 68 Average life span*** 85 25+ YEARS *Cornmarket customer average retirement age. Source: Cornmarket 2017 **From 2028, the State Pension age will increase to 68, Source: pensionsauthority.ie ***Source: Stanford University, October 2018
How Superannuation is broken down Pension Spouse & Lump Sum Child Benefit Taxed & Payable Tax-Free & Paid for Life on Death Paid Once
4 Different Schemes Your Pension Scheme Depends on when you joined Pre April 1995 to 1 2 April 1995 March 2004 April 2004 to From 3 4 December 2012 January 2013
Six key questions you should get answered 1 Are you A1 or D1 PRSI? ? 2 What age can you retire? ? 3 Will you need Job Seekers Benefit? ? 4 Are you entitled to a Supplementary Pension? ? 5 Cost Neutral Early Retirement? ? 6 Are you entitled to an old age pension? ?
You could have multiple sources of income in retirement Job Seekers’ Supplementary Superannuation / Old Age Pension Benefit Pension Pension
Normal Retirement vs Cost Neutral Early Retirement? Retire earlier than your normal retirement age Up to 10 years earlier! From age 50 or 55 depending on when you joined the public sector
How does it work? € € € € The earlier you € retire, the less pension & lump sum you receive At 2 Years 5 Years 10 Years Early Retirement Early Early
Additional Voluntary Contributions Warning: If you invest in this product you may lose some or all of the money you invest. Warning: This product may be affected by changes in currency exchange rates. Warning: The value of your investment may go down as well as up. Warning: If you invest in this product you will not have any access to your money until you receive your Superannuation Benefits.
Additional Voluntary Contributions 1. 2. 3. 4. What is All about Drawdown Is a Lump an AVC? tax relief options for Sum AVC your AVC for you?
So what is an AVC? It is an Additional Voluntary Contribution (AVC) you can make towards your retirement benefits, like a shortfall in your Lump Sum.
Why take out an AVC? 1 Early retirement ✓ 2 Shortfall in service ✓ 3 Over 40 years service ✓ 4 Non pensionable earnings (overtime) ✓ 5 Revenue maximum pension ✓ 6 Make the most of tax relief ✓
Pay LESS tax now + Have MORE money in retirement Contribution € 100 Less Tax Relief* € 40 € 60 Real cost to you *assuming tax relief at 40%
How much can you contribute? Maximum % Age of Salary Under 30 15% 30-39 20% 40-49 25% 50-54 30% There 55-59 35% are limits 60+ 40%
Average Cornmarket AVC values € 25,000 Invested In 2018, € 17,000 tax relief (assuming 40%) 1,500 (assuming 40%) members € 11,000 Investment growth retired € 53,000 at retirement Source: Cornmarket, April 2019. Figures have been rounded to the nearest thousand and are based on 1,520 Cornmarket Clients from five AVC Schemes.
How an AVC fills € 18K € 18K An AVC a Lump Sum fills the from AVC shortfall shortfall* gap! Mary is retiring with a salary of € 60,000 and has: € 90K € 72K 32 years service 40 year Actual AVC fund € 100,000 Tax free! service Lump Sum Lump Sum *Source: Cornmarket, 2019. Based on the Revenue maximum Tax Free Lump Sum available at 40 years & 32 years of service.
By taking out an AVC... You could work for 32 years & get the exact same Tax Free Lump Sum as someone who worked for 40 years ... That’s 8 years longer!
What options do you have for the rest of your AVC? 1 3 5 Purchase Approved Combination employer benefits Retirement Fund (ARF) 2 4 Annuity Taxable cash (income for life)
1 € 82,000 AVC Purchase employer Superannuation benefits NSP’s
2 € € € 82,000 AVC Annuity (income for life) Additional pension € 3,000 per annum* NSP’s *Source: Irish Life Pension Prophet, 15/03/2019. Figures have been rounded to the nearest thousand. May be subject to tax, PRSI and USC.
3 € € 82,000 AVC € Approved Approved Retirement Retirement Fund Withdrawal as Fund (ARF) * € required ** *Requirement for ARF – guaranteed income of € 12,700 p.a.**May be subject to tax, PRSI and USC.
4 € € € 82,000 AVC Taxable cash* Payment made net of Tax & USC** *Requirement for Taxable Cash – guaranteed income of € 12,700 p.a. .**Universal Social Charge & Other terms and conditions apply.
5 € 82,000 AVC Combination * ARF ** Taxable Cash ** Employer options Pension *May be subject to tax, PRSI , USC **Requirement for ARF, Taxable Cash - guaranteed income of € 12,700 p.a
Don’t have an AVC? A Lump Sum AVC may be for you!
What is a Lump Sum AVC? It’s a “ Last Minute”/Single Premium contribution you can make to maximise your tax free lump sum at retirement!
Example* John did a Lump Sum AVC € 20k € 15k € 14k € 6k He paid € 14,000 € 6,000 = € 5,000 in back from back from € 15,000 Cornmarket Revenue Profit by doing a **Inclusive of fees & charges** tax return ***assuming 40% tax relief *Source: Cornmarket, 2019 . Figures have been rounded to the nearest thousand ** € 595 fee plus 4% contribution charge. An annual management charge will also be applied by the insurance company. The typical charge is 1% per annum. The € 595 fee only applies if you are not already a member of the AVC Scheme.
Reasons why you may need a Lump Sum AVC Are short service Have service over 40 years Have non-pensionable earnings Cornmarket Tax Return Experienced a reduction in pay Service* *Cornmarket Tax Return Service is a tax based service and not a regulated financial product.
Reduction in Pay in the last 10 years? Ask your employer Step 1: to fill out our form Let us do the work for you We use our Step 2: ‘ dynamisation ’ calculator You find out if you’re Step 3: due extra tax free cash!
To set up a Lump Sum AVC Meet with a Cornmarket expert BEFORE you retire Your service, age & tax band determine if you’re eligible... We can help It takes approx. 6-8 weeks you with this!
Other Services Retired Members Inheritance - Savings Life Cover Planning Car Travel Health Home
To sum up Pension Planning is COMPLEX – LET US HELP Your Pension Let us do the work for you and Lump Sum Options on drawing down your AVC Lump Sum AVC
Fill out the appointment card to book your FREE consultation! Let us do the work for you For a copy of today’s slides visit cornmarket.ie/retirement-seminars Cornmarket Group Financial Services Ltd. is regulated by the Central Bank of Ireland. A member of the Irish Life Group Ltd. which is part of the Great-West Lifeco Group of companies.
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