As the tax deadline on October 31st nears, now is the ideal time to give your retirement savings a boost. At Halpin Wealth Management, we’re focused on helping you prepare for a stable financial future, and making Additional Voluntary Contributions (AVCs) or a lump sum payment to your pension is one of the smartest ways to achieve this.
Why Act Now?
- Increase Your Retirement Income Adding extra contributions to your pension—whether through AVCs or a one-off lump sum—can fast-track the growth of your retirement fund. The earlier you make these contributions, the better chance you have of enjoying a comfortable lifestyle in retirement.
- Significant Tax Savings One of the most appealing aspects of AVCs is the tax relief they offer. Your contributions are eligible for tax relief at your marginal rate, meaning you reduce the amount of tax you pay for the current or previous financial year (within certain limits). If you’re a higher earner, the potential savings could be considerable. By acting before October 31st, you’ll ensure your contributions count towards the last tax year’s relief. Example: If you’re 34 and earning €100,000 in 2023, making a top-up contribution of 15% (€15,000) could give you a tax refund of €6,000.
- Smart Contribution Strategies If you’re part of an occupational pension scheme, it’s worth contributing up to the point where your employer matches your contributions. For instance, if they match up to 8%, maxing that out makes financial sense. Beyond that, it might be more strategic to contribute to a separate pension provider, diversifying your investments and spreading risk across multiple funds or institutions.
- Flexibility with Contributions You decide whether to make regular contributions or a one-time lump sum. This flexibility allows you to adapt your pension savings to fit your current financial circumstances. Opting for different providers or funds also diversifies your portfolio, helping manage risk effectively.
- The Power of Compounding The earlier you contribute, the more time your pension has to grow. Thanks to the magic of compounding, even modest additional contributions can have a significant impact on your retirement fund over time. Plus, don’t forget: profits within a pension are tax-free—no capital gains tax or exit tax applies.
How to Get Started
Ready to make the most of your pension savings? Whether you’re considering a lump sum contribution or regular AVCs, our team at Halpin Wealth Management is here to guide you through the process and tailor advice to your specific needs.
Let’s Chat
Get in touch with us to discuss the options available to you. Don’t miss the October 31st deadline—taking action now can set you on the path to a more secure retirement.