The last 18 months has taught us a lot. We realised the importance of hand hygiene, the incredible work our medical professionals do on a daily basis and the joy in simple things like a pint in a beer garden or embracing a loved one. This pandemic has been painful and heartbreaking in parts but it has also shown how resilient we are as a nation and how integral the construction section is to our economy and our recovery.
Naval Gazing and Crystal Balls
The pandemic gave us time to think and reflect – about our careers, our families and the precious moments we missed.
We are not clairvoyants, but as the economy reopens, many of us are looking to the future, some with hesitancy but for most of us, it is with a renewed sense of optimism.
Some may question our sanity discussing pensions during a pandemic. But as we try to deal with the here and now of daily life, it’s important not to lose sight of the future. In fact, pension reform was one of the main issues raised in the February 2020 election (we know, it feels like an age ago now). We were and still are concerned about our futures in retirement and providing a good standard of living for ourselves.
Regardless of your age, the size of your pension pot or your current situation – we all look to our future retirement with a sense of optimism. We imagine getting rid of the 6am wake up call, the ability to pack our bags and travel at the drop of a hat, spoiling grandkids, taking up a new hobby or finishing that project you have not had time to complete in recent years.
Making Ends Meet
All those optimistic hopes and daydreams will be out of reach for many on the State pension. While we do not relish in the doom and gloom of future finances, it is important to point out that the State pension (currently just under €13,000), will only provide for living expenses. The government want to ensure retirees can afford to live but the State Pension does not guarantee discretionary spending such as holidays, creature comforts and subscriptions to your favourite sports channels. According to the latest CSO figures, 65% of us have accepted this and have additional pension cover to bolster the State pension amount.
You Make the Difference
Ireland has been facing into a pension timebomb for some time. While these issues are being pushed further and further out by successive governments, there are ways in which the government have helped us to protect ourselves from the potential fallout. These take the form of generous tax relief, which is available and actively encourages us all to build up retirement savings for a healthier pension amount. These measures may face restrictions in the future, but for now, they are a great way to save on tax while saving for your future.
Taking control and Getting Back on Track
Setting goals and looking into the future is often the easy part – making the plan and sticking to it can be trickier! Pandemic aside, we understand that school fees, a veterinary bill or car repairs can derail the best-laid plans. With that in mind, we have outlined three straightforward starting points you might consider following to get you on the right track to a better life in retirement:
- Understand the now: Knowing what you have currently in terms of assets, savings and pension pots is the first step we would advise you to take. You may have contributed to various pension pots over the years of your employment with various employers. Now is the time to track the details down and commit them to paper.
- Know what you want in the future: This is not just the nice holidays and sports channels. It is important to understand your current expenses that will carry on into retirement. If you have kids, they will (hopefully) have flown the nest (so to speak), before you retire but what about those heating bills, house maintenance, and health expenditure. All these things are important to add to your plan. Knowing what you want from your retirement after that, should be easier. You may need your retirement savings to last up to 30 years after you retire so setting realistic expectations of the lifestyle you want and understanding what you need to have saved is really important.
- Knowing what to do to achieve those retirement goals: Whether you are banking on a cryptocurrency pay off, hoping a land purchase returns high dividends in the future or selecting a fund for your retirement savings that you hope will make the necessary returns, it’s vital to get advice from a financial expert. When it comes to your pension, the various schemes administered by CPAS (CWPS, CIRT and CERS), can help you with your pension. For more general financial advice, we recommend Milestone Advisory. The team there can help you navigate the sometimes perilous and confusing world of finance. This way, you can rest assured, knowing your future hopes and aspirations are achievable.
Time is the most important ingredient in your plan for retirement savings. Start early and reap greater rewards (thanks to compound interest).When you know what you have, what you want and have a plan of action to help you achieve that, stick to your guns. Do not be derailed by the noise and fads. Your plan and your journey should be as unique as you are – so start today.
Pensions Not Products
CPAS is the pension scheme administrator for pensions in the construction sector. We do not look at pensions as products, but as the development of strategies, recognising your needs now and into the future. We work with our members to identify a clear vision for the future, achievable goals and then work with them to create a plan of action that they can implement today. It is about providing the right information today to help them make the most of their future.
As in life, there are many variables and changes. Planning for retirement involves forming expectations about income and expenses over the rest of your life, based on present assumptions. Our pension consultants help you cut through the complicated jargon and plan for your future in the long term.
For more information, please get in touch with our team of consultants who can provide more information (firstname.lastname@example.org).