{"id":188019,"date":"2025-12-17T09:43:09","date_gmt":"2025-12-17T09:43:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/188019\/"},"modified":"2025-12-17T09:43:09","modified_gmt":"2025-12-17T09:43:09","slug":"how-to-get-on-top-of-your-pension-and-be-well-prepared-for-retirement-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/188019\/","title":{"rendered":"How to get on top of your pension and be well prepared for retirement \u2013 The Irish Times"},"content":{"rendered":"

Your annual pension <\/a>statement may not be the most exciting read, but it\u2019s one of the most important. <\/p>\n

Hidden among the charts, projections and small print is a snapshot of how well you are prepared for retirement \u2013 and whether anything needs fixing. <\/p>\n

From checking whether your contributions and investment growth are on track, to spotting fees or a risk rating that no longer suits your life stage, understanding these things can help you avoid nasty surprises later. Here\u2019s how to decode the key numbers, what healthy green flags look like, and the warning signs that should prompt a closer look.<\/p>\n

How much?<\/p>\n

Did you get your annual pension statement yet? Scheme trustees are required to send you one at least annually. But it\u2019s one of those emails that hits your inbox, requiring a blizzard of user IDs, passwords and authentication codes to access the contents. Some people don\u2019t bother. <\/p>\n

A pension is how many of us must fund the last quarter of our lives after we have stopped working, so knowing how your pot is tracking is vital, says Tessa Hayes, an employee benefits expert at NFP Ireland. <\/p>\n

[\u00a0Over-saving may be quietly costing Irish households thousandsOpens in new window<\/a>\u00a0]<\/p>\n

Your annual statement will show an opening balance and a closing balance. The first thing to check are your contributions, and those from your employer if you are in a company scheme, are all included. <\/p>\n

\u201cWhip out your calculator and make sure the contributions that are deducted on your payslips are reflected in the statement,\u201d says Hayes. \u201cYou need to make sure all your contributions have been remitted.\u201d<\/p>\n

\u201cOf course you\u2019ll want the closing balance to be more than the opening balance, if it\u2019s less it would definitely need to be queried. But it could be an admin error on the contribution side, or you could have high charges, so it\u2019s important to check,\u201d says Hayes. <\/p>\n

\"\"Why are apartments in Ireland so much more expensive to build than houses?<\/p>\n

The latest report from the Society of Chartered Surveyors Ireland shows that only the top 20 per cent of earners can afford to\u00a0rent\u00a0an average\u00a0apartment\u00a0built in Ireland in 2025, while just the top 40 per cent of earners can afford to buy one.Paul Mitchell, a chartered quantity surveyor and one of the authors of the Real Costs of New Apartment Delivery report, joins host Ciar\u00e1n Hancock and Cliff Taylor of the Irish Times to drill down into the main findings of the report.And despite the numerous Government interventions, the cost of building apartments has soared in recent years, but Paul Mitchell is adamant that this report is actually a good news story.Produced by John with JJ Vernon on sound.<\/p>\n

If you are part of your employer\u2019s scheme and they offer to match your contributions, make sure you are maximising this. <\/p>\n

Some employers will match your contributions, up to 5 per cent of your income, for example \u2013 so if you are putting in 1 per cent, they will put in 1 per cent, but that means there\u2019s an additional 4 per cent you could be getting that you are leaving on the table.<\/p>\n

\u201cIf you can afford to push it up a bit, to 3 or 4 per cent even, yes it\u2019s a little bit extra every month out of your payslip, but are benefiting from tax relief on that and you are also maximising what you can get from your employer,\u201d says Hayes.<\/p>\n

\u201cIt\u2019s essentially free money \u2013 it means you are making the most of your remuneration package.\u201d<\/p>\n

Charges<\/p>\n

Are you paying too much in charges? If you don\u2019t review your annual pension statement, you\u2019ll never know. <\/p>\n

Most benefit statements list something called an \u201cannual management charge\u201d or AMC \u2013 that\u2019s how much you are paying a fund manager to manage your pension investments. <\/p>\n

There can be a significant variation on this between pensions \u2013 from 0.75 per cent, for example, up to 1.2 or 1.5 per cent. <\/p>\n

\u201cAnything higher than 1.5 per cent would be something to query,\u201d says Hayes. \u201cIf you are being charged a high amount and you don\u2019t feel you are getting a good service, query it with the provider.\u201d<\/p>\n

Teresa Bruen, financial planning consultant at Gallagher, has seen charges of up to 1.75 per cent.<\/p>\n

\u201cYou would really want to be coming in at 1 or 1.25 per cent \u2013 that would be standard to cover a pension adviser fee,\u201d says Bruen. <\/p>\n

Those who are part of a company group scheme will likely be paying much less, she says.<\/p>\n

\u201cIf you are paying anything above 1.25 per cent a year, particularly as your pot grows, that\u2019s really going to eat into the growth and its potential as the years go on, so that would definitely need a review.\u201d <\/p>\n

Risky business<\/p>\n

Are you an overly cautious \u201c1\u2033 or are you taking a walk on the wild side at a \u201c7\u2033? Your pension statement will represent your risk rating, or \u201cinvestment strategy\u201d, as a number. This can range from a scale of \u201c1\u2033 which equates to \u201cvery low risk\u201d, up to \u201c4\u2033, which is \u201cmedium risk\u201d, right up to \u201c7\u2033, which is \u201cvery high risk\u201d.<\/p>\n

A pension with a risk rating of \u201c6\u2033, for example, might mean your contributions are invested mostly in higher-risk\/higher-reward items such as equities, rather than less-risky bonds or cash. <\/p>\n

[\u00a0Pension decisions: Aligning risk appetite with your long-term financial goals is keyOpens in new window<\/a>\u00a0]<\/p>\n

When it comes to gauging if you are taking the right amount of risk, age is the starting point, says Hayes. If you are in your employer\u2019s scheme and on that pension provider\u2019s \u201cdefault\u201d investment strategy, the fund manager will de-risk you the closer you get to retirement, she says. This can happen from about 15 years out from retirement, so at around age 50. <\/p>\n

\u201cWhen you are in your 30s and 40s, though, you want to stay in those high-growth assets which are higher risk, so you want a good equity content there. The majority of multi-asset funds would be well diversified and would carry a good mix of asset allocations,\u201d says Hayes. <\/p>\n

\u201cIf you are 40, and plan to retire at 65, that\u2019s 25 years\u2019 growth, so you don\u2019t want to jump the gun early, so you stay in the high-growth phase,\u201d says Hayes. \u201cYou\u2019d be staying up at your \u20185\u2032 or \u20186\u2019.\u201d <\/p>\n

If you are more than 15 years out from retirement, you have more time to take investment risks that can pay off, and for your pot to recover if they don\u2019t. <\/p>\n

Younger people are going to have 70 per cent of their pensions in stocks, but those in their 50s might veer more towards the bond market, keeping up with inflation, says Bruen. <\/p>\n

If you\u2019re approaching 50, it\u2019s time for a chat with your fund manager, she says. <\/p>\n

\u201cSome people aged 50 come into us and say, I want the highest-risk fund \u2013 that\u2019s fine, but how do you actually feel about risk \u2013 does it give you the heebee jeebees? Then you probably shouldn\u2019t really be in a high-risk fund,\u201d says Hayes. <\/p>\n

Your choice is usually tempered by when you plan to retire and your temperament.<\/p>\n

\u201cYou might have someone who is 35 and is planning to retire at 50, so when you hit 40, we probably should look at reducing volatility,\u201d says Hayes.<\/p>\n

\u201cIf you are going to retire at 65, once you hit 50 or 55, you would gradually start to reduce volatility and move away from those high-growth assets and bring in bits of cash, bonds and less-volatile funds,\u201d she says. <\/p>\n

\u201cIf you are not in a default fund that doesn\u2019t automatically do all of this for you, it\u2019s really important that you are engaged with your adviser and keeping an eye on it because those decisions will be up to you to make and won\u2019t be done for you.\u201d<\/p>\n

If you are in your 50s and you started a pension late, you haven\u2019t contributed enough, or your pot isn\u2019t as big as it should be, you have some choices, says Bruen. <\/p>\n

\u201cI have 50 year-olds in and we discuss risk and gauge their risk tolerance, if they go with a \u20182\u2019 or \u20183\u2019 risk, they are going to have a huge shortfall in retirement, so they have two options: they can either work longer, or try to take more risk, but with that they could end up with less. But they will never have the chance of making up the difference if they stay at the lower risk. For some people, it can make sense to take higher risk in their 50s,\u201d says Bruen.<\/p>\n

\u201cAsk yourself, if there was a market correction, and it badly affected your pot, are you okay with working a few extra years until your pension comes back,\u201d says Bruen.<\/p>\n

Reviewing your annual statement and discussing it with your fund manager can be a pleasant surprise for some.<\/p>\n

\u201cIf you get to that point in your 50s where your pension has given you the tax-free lump sum you want and the income you want in retirement, then you\u2019ve done enough,\u201d says Bruen. <\/p>\n

Projected fund value<\/p>\n

As well as an opening and closing balance for the year, your pension statement or pension portal is likely to show you your \u201cprojected fund value\u201d. <\/p>\n

Whatever the figure, know that it\u2019s not a promise. <\/p>\n

\u201cWe think of it more as a range than an outcome,\u201d says Tessa Hayes. \u201cIt\u2019s not guaranteed. Yes, comparing this figure year on year can be useful, but it does not confirm what you will actually get in retirement.\u201d<\/p>\n

Your projected fund value figure can give you a sense of whether things are on track, however. <\/p>\n

\u201cWe don\u2019t have a crystal ball \u2013 the market in the past year has been volatile and there will always be ups and downs. We don\u2019t know what the markets will be in 20 years\u2019 time, so it\u2019s just a guide. It\u2019s something based on standard assumptions and it considers future returns,\u201d says Hayes. <\/p>\n

Don\u2019t make the mistake of thinking your State pension will be in addition to the projected fund value figure \u2013 most pension providers include this in their figures. <\/p>\n

[\u00a0Pension planning: Take risk, reward and the inflation trap into accountOpens in new window<\/a>\u00a0]<\/p>\n

But how much should your end pot be actually worth?<\/p>\n

\u201cWe would like to aim for about 70 per cent of your income, that would be ideal in retirement,\u201d says Hayes. <\/p>\n

Everyone\u2019s expectations and lifestyle are different, however. If you are earning \u20ac50,000 a year, for example, the State pension will amount to about 30 per cent of that, so there would be a big gap there, she says.<\/p>\n

Achieving 50 per cent of their income can be fine for some in retirement, she says.<\/p>\n

\u201cYou want to make sure you have all the money to do the things you want to do. We are all living longer. Before, you might have needed a pension for ten or 15 years, now it can be for a quarter of your life, so it\u2019s important you have enough to sustain you,\u201d she says.<\/p>\n

Maximising any employer contributions, and all the tax relief available to you, can make a big difference to your pot. <\/p>\n

\u201cMaking use of every opportunity at every pay-day is really key,\u201d says Hayes. <\/p>\n

Allocation<\/p>\n

Are all of your contributions going into your pension? The \u201callocation\u201d figure, or \u201callocation rate\u201d, refers to the percentage of your contribution that is actually invested into your pension fund. The remaining percentage is a fee charged by the pension provider, often called an \u201centry fee\u201d or \u201centry charge\u201d. <\/p>\n

Most providers offer 100 per cent allocation, which means 100 per cent of your contributions hit your pension pot. <\/p>\n

\u201cSome people are on allocations of only 95 per cent and they don\u2019t realise it,\u201d says Bruen. \u201cSo every \u20ac100 they put in, they are already down \u20ac5, or 5 per cent, so their pension has to work 5 per cent harder before it starts actually making a return for them,\u201d she says. <\/p>\n

That\u2019s an important thing to check rather than focusing solely on performance, says Bruen. <\/p>\n

If the allocation is not what you expected, this can flag that it\u2019s not the right product for you, she says. <\/p>\n

Legacy pensions <\/p>\n

How many of us have inactive pensions from previous jobs?<\/p>\n

These older plans can have higher charges and if they are sitting with an older employer, you may not really have much say in the investment strategy, says Hayes.<\/p>\n

The first step is to track down any old pensions from previous jobs, you can do this by contacting that company\u2019s HR department. If you hit a dead end, you can contact the Pensions Authority<\/a> \u2013 they don\u2019t hold details of individual entitlements, but they can help identify the administrator or trustees of a specific scheme. <\/p>\n

If you have a few old pensions, it\u2019s worth talking to a pension adviser about whether it\u2019s a good idea to transfer one of them to your current work pension, or not. By doing so, you might be giving up earlier access to that pot \u2013 some old schemes you can access from age 50, for example. <\/p>\n

At a minimum, track down pensions and get a pension statement, and update them on your address and beneficiaries, says Hayes.<\/p>\n

\u201cYou\u2019d be surprised at the amount of legacy pensions people have no idea they have. It might not be a lot of money, but it can bolster up your pot in the end.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Your annual pension statement may not be the most exciting read, but it\u2019s one of the most important.…\n","protected":false},"author":2,"featured_media":188020,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,246,8759,111,139,69,2180,244,245],"class_list":{"0":"post-188019","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-money-matters","11":"tag-new-zealand","12":"tag-newzealand","13":"tag-nz","14":"tag-pension","15":"tag-personal-finance","16":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/188019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=188019"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/188019\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/188020"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=188019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=188019"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=188019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}