Preparing for retirement

Most people need to work to earn an income to support their family and themselves. When we reach retirement age and stop working, this earned income stops, so naturally there is a fall off in the level of our income. Therefore making plans to replace this income, in part or whole is a priority.

There are four possible means of making provision for your retirement and these are usually referred to as the “Four Pillars”.

First Pillar – State pensions, there are two types of State Pension systems in existence. The Social Insurance System, pensions are provided as of right at the age of 66 (earliest), to individuals who have paid the required Pay Related Social Insurance (PRSI) contributions during their working lives. The Social Assistance System, pensions are provided as of right at the age of 66 (earliest) this is by way of a “means test”, so only those who can prove they have a very limited financial means and resources. An individual come only qualify for one state pensions.

Second Pillar –  Private provision. Again, there two main types of private provision for retirement, individuals contributing to their own pensions by a Personal Pension Plan, a Personal Retirement Savings Account (PRSA) or by Additional Voluntary Contributions (AVC’s), or an Occupational Pension set up by an employer.

Third Pillar – Personal Savings and Investments, where individuals put funds aside for their “Retirement Nest Egg”. these savings and investments can be in the form of deposit accounts, property, stock & shares, life assurance, investment bonds.

Fourth Pillar – Earning in Retirement, more and more people are taking up some sort of part time work to supplement their retirement income and also to keep active /involved in the community

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