How Does Pension Plans Work for Married Couples in Ireland

 

When it is about time to plan your life after retirement, make a conscious decision with personalised financial advice and complete insights for all your queries. Here are some insights provided by a leading pensions planner in Cork City to get you started with pension planning for you and your spouse.

 

 

How Pensions Work In Ireland

 

A pension is a funding system offered by organisations to their employers and directors. It involves depositing a percentage of the salary or shares in the fund throughout the working years of the employee. The deposits mature into a lump sum amount over a certain period. Once the employee reaches retirement age, they can choose between taking up the entire amount at once or going for annuity payment. With an annuity payment, you will receive a salary-like monthly payment for the rest of your life.

 

If you are not employed by a company that provides pensions, you will be unable to obtain one on your own.

 

Nowadays, even small organizations would offer joint pension policies for an employee and their spouse, but it will be given in the name of one director only. Another provision of the Irish State Pension is also available for Social Insurance Contributors.

 

 

Combined or Separated Pension Policies - What Is A Better Pension Plan For Couples

 

Consolidating your pensions will help you keep track of the administrative expenses you are entitled to pay, and it can also help you save costs if you consolidate your pensions into a new plan, which could be eating away at your old pensions. However, in the case of a legal separation, or divorce, such consolidated schemes would incur an exit fee and additional costs. As convenient as it may seem, in many instances, having a separate pension plan for each spouse makes a better choice for certain "obvious" scenarios.

 

 

Combining Pension Policies Of Both Spouses

 

Financial independence is crucial for every adult, even married couples. But sometimes, it is out of our control, resulting in one spouse being completely or partially dependent on the other spouse for their financial needs.

 

As put forth by the Citizen Information, In Ireland, pension policy may allow the payment of a lump sum or a pension to a named beneficiary upon your death or retirement. You may be able to name your cohabiting partner, husband or wife as the beneficiary in this scenario. In the case of pension annuities, the owner of the pension can specifically request that a lower level of benefits continues to be paid to a spouse in the event of the death of the pension holder.

 

The legislation only addresses the problem of being entitled to half of each other's pension in the event of a separation or divorce, when a pension adjustment order can be granted.

 

One benefit of the State Pension is that if the entitled party dies, and the surviving person doesn’t have enough PRSI contributions in their own right, then they might be entitled to a widow’s or widower’s pension. This applies both to married couples and civil partners.

 

 

Tax And Pensions

 

Occupational pensions are subject to taxation. But because the income is much lower than regular working persons, many retirees do not always have to pay tax. Occupational pensions are taxed under the PAYE system (the 'Pay-As-You-Earn' System), thus the procedure is the same as when you were paid your income.

 

 

Wealth Management and Retirement Planning For Business Owners

 

If you are not an employee and are a business owner, you can still consult a Business Advisor in Cork for more personalised assistance on pension planning or retirement planning.

 

In Ireland, you can find several types of Pension structures, for personal pensions, pension schemes for company directors or self-administered pensions. When your retirement also includes your beloved, it is about time you get in touch with a professional advisor to get the best solutions for the long term.