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Beating the Tax man

Beating the Tax man

The tax man, Iove him or hate him there is a way to beat him and hold on to some of your hard earned income. With all the talk of the upcoming budget do not forget about the tax deadline dates, you could still reduce your 2016 tax bill and/or get a tax refund!

I know pensions are not the sexiest or most important things on people’s minds but there is an important tax deadline coming up on the 14th

November..  Pensions are a great way to beat the tax man, hold on to some of your hard earned income and save a few pounds for your old age. A contribution towards a pension can still be used to reduce your 2016 tax liability and/or get you a tax refund.

How do you beat the tax man, with 40% tax relief for higher tax payers and 20% for lower tax rate payers. So assuming you are a higher rate tax payer for every €100 paid towards your pension  the tax man will refund or reduce your tax liability by €40, pay €1,000 = €400 tax reduction or rebate etc….

Yes, I know your next question is, “but do pension make sense”. Below I have listed a few reasons why you should consider contributing towards a pension.

At retirement would you survive on €238.30 per week, which is the current personal state pension. Think of your bills, holiday plans, car, socialising, sky, shopping, golf etc..

The state pension age is increasing to age 68 for those born in 1961 or younger and personally I think this will keep increasing. Simply put, currently in Ireland there are 5.3 adults of working age for every pensioner, but this ratio is predicted to change to 2.1 to 1 by 2050, I would not be planning on a generous state pension to keep me in my old age.

Life expectancy for those born in Ireland is now is 78 years for males and 82 for females, I personally want to go out with a bang and enjoy my retirement. Sorry kids what’s mine is gonna be spent!!

Other pension benefits

  1. Tax relief of 40% or 20% available, as above …. €1,000 contribution = €400 tax reduction or rebate etc….
  2. Tax free growth on pension funds
  3. Tax free lumpsum of up to €200,000 on retirement
  4. Tax free death benefits
  5. Tax efficient income options at retirement

If you want to get back some of your hard earned income form 2016, do not delay, get good independent advice on your options from an established Financial Broker (yes, like me).

Do you want to retire rich, then plan for it. Visit www.planreview.ie or give me a call on 0868290989. Kevin

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