Blog – McCarthy & Associates – Galway Talks, 27/08/2015

Question: I am moving jobs and need to make a decision about the pension scheme I have paid with my previous employer, I have been advised to move my funds into a Retirement Bond and I am unsure what to do with this.
Answer: We now live in an era where people are more mobile in jobs. It is estimated that the average time frame that somebody will stay in a position is 7 years.
It is conceivable that, when you reach retirement age, to have a number of pension schemes from previous employers.
When you move employment you will be offered a number of options. One is to move your monies into a Retirement Bond which gives you control over the investment of your benefits without the involvement of your previous employer, subject to normal Revenue retirement rules.
I would recommend that this is the most flexible option and there is also the added attraction that you could drawdown your pension after age 50.

Question: Should everybody have a pension scheme?
Answer: Of course everybody should. The problem is the affordability for some people but even if you start small, also remember that you cannot work forever and that you need to provide for your old age.
If you are in employment and there is an Occupational Scheme available, you will benefit from contributions made by your employer.
You will also receive tax relief on your own contributions you, which in my opinion makes entering an occupational scheme—a no brainer!

Question: I have some money which recently matured with An Post but they are offering me extremely low returns for reinvesting it. What other options do I have?
Answer: Some people think that the rates from An Post are more attractive than alternative options. The problem is that An Post is a deposit taker like any bank and is influenced by market rates. The average return with An Post is circa 1% per annum and whilst you have considerable security, it comes at a price.
The reality is that investors will have to take some element of risk if they want to achieve reasonable returns.

Question: I am a PAYE worker and I need to make a tax return which I have not needed to do recently. Do I need an accountant or can I do it myself?
Answer: A lot more PAYE workers are finding that they have to make a tax return, when they did not have to do so previously. This is because they may have other sources of income e.g. rents or they wish to make a claim for an allowance etc.
If your situation is fairly straight forward, it is not that difficult to do the return yourself and there is considerable help on the revenue website. Alternatively, if you are more comfortable you could go to an accountant and request that he does the return for you and you probably could then do it yourself in future years.