Planning for retirement in your 50s
Maximising pensions tax relief and pension contributions
In your 50s retirement is more in sight and you may find retirement creeps more into your conversations with your friends. Any estimates you have for your eventual retirement income will start to take on a new reality — and the closer you get to starting to take your money, the more accurate those estimated amounts become.
Take your pension planning very seriously in your 50s. Weigh up the age at which you think you may be able to afford to retire or reduce your time spent working. Spend time with your Financial Broker reviewing your pension to ensure:
- you’re maximising income tax relief (up to 35% if you are aged between 55 and 60).
- you’re contributing as much as you can possibly afford to give yourself the best chance of a comfortable retirement.
- you know where all your pensions are and consider combining them under one provider.
You may also want to think about reducing your pension’s exposure to investment risk. It wouldn’t be good to see the value of your savings fall heavily just before you start to access your money. So be aware of how your money’s invested and see if lower-risk options are available and whether they’d suit your needs.
Many modern pension plans manage this risk automatically for you in the run-up to retirement, gradually switching out of riskier investments into safer investments. For example, with Aviva’s default investment strategy, My Future, we automatically and systematically derisk your pension the closer you get to retirement, if you’re unsure, check whether your own pension does this and, either way, check what your options are.
For your 50s, our top tip is to work closely with your Financial Broker to get your pension ready for the home straight.
Help, I haven’t started paying into a pension yet!
If you find yourself in your 50s without a pension plan, don't worry! There's still time to get your retirement savings on track. Start by looking at your current financial situation and thinking about what you want your retirement to look like. Enrolling in a pension plan is a great way to maximise tax benefits and investment options. If you're a business owner, consider tax-efficient pension options like PRSAs. Remember, there is always time to start saving for retirement, and there are always ways to make up for lost time when building up your retirement savings by contributing as much as you can afford.
Read our article on how to get your pension savings moving.
Saving for retirement in your 50s – understanding the benefit of tax relief
Your Financial Broker – the best place to get your pension in shape
In a recent Brokers Ireland Survey, those who sought pensions advice tended to have much bigger pension pots compared to those that didn’t1. So, if you're thinking about your pension, it's definitely worth considering speaking to a Financial Broker to make sure you're on the right track. They’ll help you create a personalised pension plan to help you build a secure retirement and safeguard your hard-earned money.
Expert advice
Want expert advice on pensions and retirement? Contact your Financial Broker today.
- Source: Brokers Ireland Survey July 2023 ‘The value of advice’. The average pension pot of those who sought pensions advice from a financial broker was €130,525 compared to €84,230 for those who didn’t seek advice.
This article is not intended to give advice or a personal recommendation. If you'd like a personalised recommendation based on your circumstances, you should speak with a financial broker. You can find a financial broker on brokersireland.ie.
Remember that tax laws can change over time, so it is important to check revenue.ie for the latest information.
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