What type of pensions are there?

The simple answer? Yes.

At 30, you might feel too young to be thinking about retirement, but by starting now you give your investments more time to grow. Even small contributions made now could be significant by the time you reach retirement. Plus, by starting now you have flexibility; you have time to adjust your strategy, increase your contributions, and adapt to changes in your finances.

This depends on the type of pension scheme you have:

Personal Retirement Savings Account (PRSA)

If you have a personal pension plan such as a PRSA or a Personal Retirement Bond (PRB) then it is yours and belongs to you regardless of where you work. It’s portable, so you can change jobs and continue to contribute to it.

When you do change jobs and have access to a pension through your new job, make sure that you understand how this works so that you know your options. It could make more sense to put your money into one over the other, so seek advice from a financial advisor to make an informed decision about your pension.

Occupational Pension Scheme

If you are a member of an employer pension scheme, you can:

• Leave your pension fund where it is, where it will continue to be invested until retirement.
• Transfer it to your new employers’ pension scheme which might be possible and is worth checking.
• Transfer your pension fund to a PRSA or PRB which is a pension in your own name.
• Receive a refund of your contributions (but not employer contributions), less any income tax due. Generally, this is only possible if you have been in the scheme for a short time.

When you’re in your 30s, you can claim income tax relief on pension contributions up to 20% of your salary.However, if you earn over €115,000 then you are only eligible for income tax relief on contributions of up to €23,000 per year.

Note you are not guaranteed income tax relief and that to be eligible, your income tax must be taxable under either Schedule E or Schedule D (case I or II).Answer

Starting or restarting a pension in your 30s is a great move. The earlier you start your pension, the better. Even the smallest pension contributions now could add up over the next few decades, especially if your investments do well.

Note that, as with any investment product, the value of your pension investments could go down as well as up and you could get back less than you put in.

To start a pension in your 30s, you should:

Assess your finances

Take stock of your current finances. Are you saving for a deposit or another short-term goal? Are your student loans paid off? Are you left with money at the end of each month? This will help you figure out how much you can afford to contribute to a pension.

At your age, you may be eligible to claim income tax relief on pension contribute contributions up to 20% of your income (up to a total of €23,000 in contributions a year) and claim income tax relief. 

Set retirement goals

It seems a million years away, but knowing your retirement goals will help you decide how to start your pension. Do you want to retire early? Do you imagine you will have a large family? What kind of retirement lifestyle do you envision? These are all important questions to consider.

Work out your contribution amount

The more you contribute, the better – and with potential income tax relief, it’s more affordable than you might think. Even a few percent of your salary each month is a great starting point when beginning to build your pension pot.

Seek professional advice

A financial advisor can help you get your head around everything you need to know to set up your pension, and it’s always a good idea to get professional help when setting up your pension.