A Pension Plan is still the most tax efficient way of saving for your retirement and you are never too young or too old to start your own personal retirement scheme.
There are many options available which will suit either the most conservative or high risk investor. Let Veterinary Ireland FS advise you on the opportunities available in the market place and also advise you on any existing policies you may have. Members of Veterinary Ireland, their families and employees can take advantage of special reduced rate management fees.
Tax Efficient Contribution Limits
Age % of Salary
To 29 15%
30 to 39 20%
40 to 49 25%
50 to 54 30%
55 to 59 35%
60 and over 40%
The Pension earning cap is €115,000 so you will only get tax relief on the age appropriate % contribution of your earned income up to this limit.
What Type of Pension
The main reasons for investing in a pension are to reduce your tax liability and of course, to provide for your retirement. You will receive tax relief at your marginal rate up to the age related limits indicated above, investment growth is free of tax (not subject to DIRT as with regular investments) and you may be entitled to a tax –free lump sum on retirement.
Very few veterinary practioners are members of an occupational pension scheme and so are responsible for the funding of their own pension schemes. This also means that you can opt for either a Personal Pension or a PRSA (Personal Retirement Savings Account). We will be happy to explain the differences between the two types of policy and advise you on the best option for your own personal circumstances.
If you do happen to be a member of an occupational scheme then you may still have capacity to make contributions into a Personal Retirement Savings Account.
With your own Personal Pension or PRSA you have the following options and advantages:
Choice of provider – We can research the market and find the best deal for you.
Choice of funds – We can advise you on funds that suit your attitude to risk
Transparent Charges – Charges and Allocation rates will be fully explained and will be at reduced rates for members of Veterinary Ireland.
Allocation Rates – Veterinary Ireland Financial Services will negotiate the best possible allocation rates for your pension contributions.
Planning on Retiring
When you retire, you can take part of your pension fund as tax-free cash. In addition you have to decide how best to provide yourself with an income in retirement.
Your options here are:
To purchase an annuity
To invest in an Approved Retirement Fund (ARF)
An annuity is designed to provide you with a guaranteed income for the rest of your life. It is important you choose an annuity that reflects your needs and those of your spouse in retirement.
Your options include:
Single or joint life. A single life annuity pays an income for your lifetime.
A joint life annuity pays a percentage of your annuity to your spouse when you die.
Guaranteed period - This is a period of time when annuity payments will continue to be paid, even if you die.
Escalation- You can choose a level income or opt for one that increases at a set rate each year.
You can invest the proceeds of your pension fund in an Approved Retirement Fund (ARF) after you retire.
Approved Retirement Fund benefits
Regular income from the Approved Retirement Fund
Control over your investments
The funds in your ARF are available to your family after your death
If your guaranteed annual income is under €18,000 (1.5 times the contributory State Pension), you must take out an Approved Minimum Retirement Fund (AMRF) first. About €119,000 (10 times the contributory State Pension) of your retirement fund is put in the AMRF and the rest into an ARF.