Thursday 14 December 2017

Get advice from experts on your financial needs

WHEN considering your options, you should take into account your current and potential future financial needs.

It is important to remember that, whatever you decide, you will need to be able to live off these entitlements for the rest of your life.

The average life expectancy is now 77 years for males and 82 years for females.

Will your pension, together with any other assets you have, be enough to provide for such things as healthcare for the next 20 to 30 years?

It must be also remembered that if you retire early and do nothing, you will have a number of years during which you have made no PRSI (pay-related social) contributions.

This will mean that you may have difficulty in qualifying for the contributory state pension.

It is not unusual for the early retirement proposal to contain a very tight deadline -- a week to 10 days is not untypical.

This puts huge pressure on you to make the right decisions, which in turn requires you to have access to the right information.

In addition to details of the offer itself, you need access to full details on your pension benefits.

Your employer should provide you with certain documents, such as the scheme's explanatory booklet; the trust deed and rules; details of how your benefit was calculated; and how it will be impacted by your decision.

In many cases, you will need to take detailed advice in order to ensure you have covered all the issues involved and are not leaving yourself short.

In one case we dealt with recently, the client was told his pension benefit was worth approximately €250,000.

However, when we delved into the details, we established an entitlement to a fund in excess of €1m.

If this hadn't been spotted, the payment offered by the employer, which was ostensibly costing €300,000, would in fact have resulted in a 'profit' to the employer of €450,000.

So for anyone who may have thought that early retirement was a relatively straightforward matter -- it certainly isn't.

Given the fact that it is one of the most important financial decisions you will ever be called upon to make, you should ensure that you have all the information you need -- and access to expert advice where appropriate.

Irish Independent

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