BING financial advice


Q. I run my own retail business since 2001, only pay myself € 40,000 and leave decent profit in the company. At 54 years of age, I really have nt done anything about a pension. Is it worth it at my age starting and is it worth doing it through the company ? It is such a confusing subject, any help would be appreciated. Peter – Malahide Co Dublin


A. Thanks Peter – yes pensions could be compared to Blackadder’s great comment about wearing cotton.. he did so without having to understand the weaving process ! First of all it is never too late to start a pension. You could invest directly yourself and claim the tax relief ( 30% of your net relevant earnings – € 12K annually, 35% when you are 55 and 40% when you reach 60 ) OR get the company to pay into your pension. There is a system called “max funding” whereby at your current age and assuming you are married, your company could invest € 68,800 this year into your pension ( saving corporation tax in the process ) or 172% of your annual salary. € 75,600 next year and rising each year until age 65. During this time, all growth in the fund or profits you make are tax-free. It is important therefore to invest in the right fund and review annually. When you do decide to retire at 65, 25% of the fund can then be taken as a tax free lump sum. The balance can be either taken via an annuity ( a fixed deposit interest rate ) or an Approved Retirement Fund ( you would need professional advice on these two systems ) Email me for details but whatever you do, do something especially as you have funds to invest. Best of luck.


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