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Where To Begin

Investing In Your Pension

June 6, 2022

When it comes to pensions, a lot of people in Ireland feel overwhelmed and confused about where to start. What is the best pension for me? How do I go about setting one up? These are common questions that people have when it comes to their retirement savings. Creating a pension plan can seem like a daunting task but with the timely advice of a financial advisor it can be a very straightforward process.

If you're looking to invest in your future, a pension plan is a great way to do so. Not only will you be ensuring that you have money set aside for retirement, but you'll also be able to take advantage of tax breaks and other benefits. In this blog post, we'll talk about how to get started with investing in your pension in Ireland. We'll discuss the different types of pensions available and what each one offers, as well as the first steps that must be taken when starting a pension. So if you're ready to start planning for your future, keep reading!

The Different Types of Pensions Available in Ireland

There are a few different types of pensions available in Ireland, and the best one for you will depend on your individual circumstances. Each type of pension plan offers different benefits. Additionally, each type of pension also possesses different criteria that must be satisfied before an individual can be eligible. Before you opt for one type of pension over another, there are a number of factors that must first be considered, from employment status and level of income, familial and dependency status, to what you would like your retirement year to look like.

Below is a brief overview of the main types of pension plans currently available in Ireland:

- The Personal Retirement Savings Account (PRSA): This type of pension is open to individuals regardless of employment status and is available to both employed and self-employed people. A PRSA is a type of investment account that allows you to invest your personal retirement savings into various types of investments via your account. With a PRSA, you can make regular or lump sum payments into your account. The money in your PRSA will then be invested and grow over time. If an employer does not make an occupational pension scheme available to an employee, then they must offer access to a standard personal retirement savings account.

- The Occupational Pension Scheme: This type of pension is offered by some employers as a retirement savings option for their employees. With an occupational pension, your employer will make regular contributions into your account, and you may also be able to make voluntary contributions from your own salary. When you retire, you will receive a retirement income based on the money in your account which has pooled over the course of your employment. There are two types of occupational pensions, the defined contribution plan and the defined benefit plan. These will be discussed in more detail below.

- The State Pension: The State pension is a retirement income that is paid by the government to people who have reached retirement age. There are two types of State pensions in Ireland, contributory and non-contributory. To qualify for the contributory state pension, you must have made above an average specific number of Pay Related Social Insurance (PRSI) contributions over the course of your professional life. This is based on a new calculation approach known as the “Total Contributions Approach” which was recently implemented by the Department of Social Protection (DSP). The amount of money you will receive from the state pension each week will depend on how much you have paid in over the years.

For individuals who do not qualify for the full contributory state pension, there is also the non-contributory State pension scheme. The non-contributory state pension is a means tested pension scheme, meaning the DSP analyses your various forms of income to determine what your weekly pension payments will be once you have reached the age of 66. The non-contributory State pension generally pays less than the contributory pension.

The criteria and nuances for each of these types of pensions can be complex and numerous so be sure to reach out to the expert advisors we have here at FitzGerald Flynn to learn more.

Defined Contributory vs Defined Benefit Plans

As previously stated, an occupational or workplace pension is a pension that is set up by your employer and to which normally both you and your employer make regular contributions. Both the employee and employer contributions are subject to revenue rules. As financial planners we at FitzGerald Flynn make it our job keeping up to date with these complex revenue rules.

Of these, there are two types of employer-sponsored pensions: the defined contribution plan and the defined benefit plan.

The defined contribution plan is a retirement savings plan where both the employee and employer can make contributions. The amount of money that you will receive upon retirement depends on how much you (and your employer) have contributed, as well as the investment returns earned over time. This type of pension gives you more control over your retirement savings, but it also carries more risk.

The defined benefit plan is a retirement savings plan in which the employer makes all of the contributions. The amount of money you will receive upon retirement is determined by a formula, and is usually based on your salary and years of service. This type of pension gives you less control over your retirement savings, but it also carries less risk. Many defined benefit plans are closed to new employees. The plans that have not closed to new employees are not as beneficial as the original plans.

Key Things You Need to Consider When Starting Your Pension

When looking to put a retirement plan in place, there are a number of things that must first be considered. How much money do you want to have saved by retirement? This will help determine how much you need to contribute to a pension each month. At what age would you ideally like to retire at? This will affect how long you have to save for retirement as well as help you understand how long you can expect to live off of your pension once you retire. What is your current income and how much can you afford to contribute to your pension each month? How do the current revenue pension limits effect how much I can save ?What is your attitude towards risk? Are you willing to take on more risk for the potential of higher returns or do you prefer a lower-risk investment? These are all very important questions which you must ask yourself in order to start working towards a pension and retirement that will ensure you are as comfortable and secure as possible as you bring an end to your working life.

Once you have answered these questions, or at least taken them into consideration, you will have a better idea of what kind of retirement plan is right for you. If you are still unsure, reach out to one of our pension experts at FitzGerald Flynn and we would be happy to help you figure out the best retirement plan for your individual circumstances.

When to Start Planning Your Pension

Once you have decided what type of pension is right for you, it is time to start contributing to your account. The sooner you start saving for retirement, the better. The earlier you start contributing to your pension, the more time your money has to grow. For instance, if you start saving for retirement at age 30, you will have 35 years until retirement - going off the current public sector retirement age of 66 in Ireland. When it comes to personal pensions, the sooner you start contributing to your pension, the less money you will need to contribute each month to reach your retirement goals.

Starting your pension early has a significant impact on the amount of income you can expect to live off during your retirement. It is never too early to start planning for retirement. If you are ready to start saving for retirement, contact one of our pension experts at FitzGerald Flynn today.


A retirement plan is a vital part of financial planning for your future. It is important to start saving for retirement as early as possible in order to take advantage of compound interest and have a comfortable retirement. There are many different types of retirement plans available, so it is important to do your research and figure out which type of plan is right for you.

FitzGerald Flynn are retirement planning experts, with over 20 years of experience in the industry. We can help you figure out the best retirement plan for your individual circumstances and make sure that you are on track to reach your retirement goals. Contact us today to get started.

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