Blog – McCarthy & Associates – Galway Talks, 28/05/2015

Question: I am about to retire and I have certain decisions I need to make with regard to my Personal Pension Plan. I am hoping you can help me?
Answer: This is a very important decision and a lot of people feel confused when faced with it. When you have a Personal Pension Plan, on retirement you have 2 options namely:
1. Take the tax free lump sum of 25% and put the balance into an Annuity which will provide you with an income for life.
2. The alternative is to take the 25% tax free lump sum and put the balance into an Approved Retirement Fund (ARF) which has certain conditions attached.
I would advise this listener to seek advice before they make any decision as it has long term implications for them.

Issue: Michael Noonan warns banks to reduce variable mortgage rates by July 1st.
Comment: This is an issue that has been continuing for some time whereby in my opinion banks are profiteering on the back of variable mortgage holders. This is because they have the freedom to increase the rates as they see fit.
The Minister for Finance has finally instructed all banks to show what steps they will take to reduce the variable rate by 1st July. He needs to have some teeth!! with the banks on this issue and ensure that the fate of these long suffering borrowers is improved.

Question: I recently looked at an investment called a Kick Out Bond. Can you explain to me how this type of bond works?
Answer: Kick Out Bonds have become very popular and creative since their launch approximately 2 years ago. Essentially a Kick Out Bond, as the name suggests, is an investment that could mature early if a certain events occur. There are a limited number of providers who issue Kick Out Bonds and whilst there is some risk attached they also provide a degree of protection.