After retirement, everyone wants to enjoy a relaxed, joyful and abundant life – without any restrictions. And to do that smoothly, many of us will need more than our pension schemes in order to maintain our current standard of living. Hence, you might be interested in paying more to increase your benefits and minimize tax bills – so that you can lead a stress-free retirement life.
Luckily, there can be many arrangements that can be made to place your money in your personal and occupational pension scheme while you are employed – and increase your fund in a flexible and tax-efficient way. For this, we have prepared a simple guide to help you better understand last-minute AVC in Dublin.
How Do I Make Additional Voluntary Contributions (AVC)?
For this, you need to ask your employer whether they have an AVC arrangement and which scheme it is under. You need to fill up an application form for the specific scheme and forward it to the payroll department of your organization. The AVP will be deducted from your next salary slip, allowing you to enjoy full tax relief at source. Anytime you want to increase, decrease or stop your AVC payments, you can simply let the payroll know and they will notify the scheme to change.
TIP: If you want, you can also pay for AVP in a lump-sum amount rather than regular monthly payments.
What Are The Advantages Of Making Additional Voluntary Contributions (AVC)?
Last minute AVC in Dublin offers several benefits. Firstly, it allows you to increase your retirement fund and boost your retirement income beyond the standard pension contributions, leading to a more comfortable lifestyle during your retirement years.
Secondly it comes with tax advantages, which means that you will qualify for relief at your highest rate of tax. Moreover, AVC ensures that the money you put in has a chance of accumulated growth. Meaning if you start your AVC today then by the time you retire, you should have more than you paid for.
AVCs can be great for pension planning and retirement savings, but if your current benefits are enough, there is no need to feel pressured to add an extra. If you are still unsure whether or not AVC is the right choice for you, speak to the financial consultants of Money Maximising Advisors Limited, who will help you assess the benefits to which you are already entitled. This will help you understand whether or not AV serves your best interest, and accordingly, you can make your decision.
At What Age Should I Start Thinking About Additional Voluntary Contributions (AVC)?
The earlier you start, the more chances you have to build your fund. But the reality is that most people don’t even think of additional payments. Currently, only 4% to 5% of people in Ireland invest in AVC, and many don’t start until they are in their 50s.
When Can I Access My AVC Funds?
Subject to the agreement from your employer and the trustees, it is possible for you to retire at the age of 50. This means that your pension will be much lower than if you had continued in employment and continued making contributions up until your retirement age, which is normally considered 65.
What Happens If I Switch From My Current Company?
Once you leave a company after you have been in their pension plan for more than two years, you can simply transfer your AVC fund to your new employer’s pension scheme. However, if you have been in the company for less than two years, you have the option to receive your AVC funds immediately, minus the taxes.
Final Thoughts
Before you jump onto starting your last minute AVC in Dublin, you must have a solid understanding of the type of pension you currently have, what benefits they offer and the Additional Voluntary Contributions (AVC) available to you. There are many specific rules and regulations in place that you must be aware of in order to maximize the benefits of AVC to the fullest.
At Money Maximising Advisors Limited, we possess years of experience in providing financial advice and Pension planning to businesses and individuals in Ireland. If you are planning for your later life, we would be glad to aid you in navigating your finances and finding the best solution for a secure and stress-free retirement.
Talk to us at +353 91 393 125
Mail us at office@mmadvisors.ie
Or visit our office at Unit 3, Office 6, Liosban Business Park, Tuam Rd, Galway, Ireland
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