Financial Music – Time for you to tune in

Did you know that the Irish revenue will allow you to receive a cheque for €200,000 tax free from your pension anytime after you hit 60 years of age?

Now that is financial music to the ears and all you need to do is take time to plan such an outcome.

I had a 40 year old client in my office for his annual financial review recently and his was a good story in the making.

He began his pension in his twenties and had €150,000 in his fund and was currently paying €500 pm {index linked at 3% pa} which was only costing him €300pm after tax.

The good news for him is that once he continues to pay his premium and based on growth rate of 6% pa his fund is on target to achieve a return of a whopping €800,000 by the time he turns 65.

The Revenue Commissioners will allow him to take a tax free lump sum of €200,000 from that and the balance will then be used to invest for an annual pension.

Based a growth rate of 5% pa in retirement this could amount to €2,500 pm for life (before tax) and in the unfortunate event of untimely death this balance fund could be left to his wife or estate.

Now I want you to think of all the things you could do with €200,000 – from paying off outstanding debt to changing your car to renovating your home or going on a world cruise. The options are endless.

All you have to do is plan now and remember, it is never too late.

The revenue still offer very valuable tax breaks of up to 40% relief on any premiums paid (up to certain limits).

So tune in and set your sights on that €200,000 tax free cheque… That way you’ll enjoy the financial music that will be played out for you.

Ps Please note units may fall as well as rise and there is no guarantees provided

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