Review your Pension

Regularly reviewing your pension is a crucial aspect of ensuring its alignment with your evolving financial goals. Periodic reviews, typically conducted annually, allow you to assess the performance of your investments, adjust contributions based on changing circumstances, and stay informed about any updates in pension regulations. By routinely examining your pension, you gain the opportunity to optimize asset allocation, assess risk tolerance, and make necessary adjustments to ensure your retirement strategy remains robust and aligned with your long-term objectives. Additionally, reviewing your pension regularly enables you to capitalize on market opportunities, address any potential gaps, and make informed decisions that contribute to a secure and comfortable retirement.

Why do I need to review my pension funds?

  • Market Volatility

    Pension funds often involve investments in diverse financial instruments, including stocks, bonds, and mutual funds. Market fluctuations can influence the performance of these investments. Regular reviews allow you to assess how your pension funds are affected by market dynamics and whether adjustments are needed.

  • Changing Financial Goals

    Your financial goals may change over time due to factors such as marriage, children, buying a home, inheritance, and changes in your company structure. Regularly reviewing your pension funds ensures that your retirement savings align with your evolving financial objectives.

  • Inflation and Cost of Living

    Inflation erodes the purchasing power of money over time. A periodic review helps you measure whether your pension fund is keeping pace with the rising cost of living, ensuring that you can maintain your desired lifestyle during retirement.

  • Employment Changes

    Career shifts, job changes, or periods of unemployment can impact your pension contributions. Reviewing your pension funds allows you to make necessary adjustments based on changes in your employment status.

  • Tax Efficiency

    Tax regulations can change, affecting the benefits associated with pension contributions.  Regular reviews ensure that you are taking advantage of available tax benefits and making the most tax-efficient decisions.

  • Pension Fees

    In the last 15-20 years, pension plans have changed a lot. One big change is that newer pensions have much lower fees. This matters because lower fees mean more money for you. When you keep track of these changes through regular reviews, you can make sure you get the most out of your pension by taking advantage of these cost reductions for better long-term financial results.

How often should I review my pension?

The frequency with which you review your pension plan depends on various factors, including your age, financial goals, and market conditions. However, as a general guideline:

Annually

Conducting a comprehensive review of your pension plan on an annual basis allows you to stay informed about its performance and make adjustments if necessary.

Life Events

Additionally, consider reviewing your pension plan after significant life events such as: 

  • Getting married

  • Having kids

  • Career changes

  • Getting an increase in your salary

  • Relocating overseas

  • Taking out a mortgage

  • Receiving a lump sum inheritance

These events can impact your financial goals and may require adjustments to your retirement strategy.

Five Years Before Retirement

As retirement approaches, increase the frequency of reviews to ensure that your pension plan is aligned with your retirement income needs and goals.

For further insights, explore our article that guides you on effective retirement planning in your 50s and 60s.

Market Changes and Inflation

Keep an eye on market conditions and economic trends. If there are significant changes, it may be wise to review your pension plan to ensure it continues to meet your expectations.

If you initiated your pension several years ago, consider the impact of inflation on your estimated monthly pension. 

Will it be sufficient in today’s monetary terms to cover any lingering post-retirement bills? If your current earnings surpass what they were when you first began your pension, can you now allocate more funds to your pension, gaining additional tax benefits and enhancing your pension savings?

Schedule a Complimentary Zoom Consultation (15 mins)

Take the first step toward a secure financial future with a free 15-minute Zoom meeting with our team. In this initial consultation, we’ll discuss your current financial situation, answer your questions, and explore how we can help you achieve your goals.

Browse through our Frequently Asked Questions below

  • Reviewing your pension in Ireland can offer several advantages. Firstly, it allows you to assess if your current pension scheme aligns with your retirement goals and financial situation. Secondly, it enables you to explore opportunities for optimizing your pension savings, such as consolidating multiple pension pots or adjusting your investment strategy to better suit your risk tolerance and objectives. Additionally, a review can help you stay informed about any changes in pension regulations or tax laws that may affect your retirement planning.

  • The frequency of pension reviews depends on various factors, including changes in your personal circumstances, financial goals, and market conditions. Generally, it’s recommended to conduct a comprehensive review at least annually to ensure that your pension strategy remains relevant and effective. However, significant life events such as marriage, divorce, career changes, or approaching retirement may necessitate more frequent reviews to adjust your pension plan accordingly.

  • During a pension review in Ireland, it’s crucial to evaluate several key aspects. Firstly, assess the performance of your pension investments and consider whether they are meeting your expected returns and risk tolerance. Secondly, review the fees and charges associated with your pension scheme to ensure they remain competitive and reasonable. Additionally, consider any changes in your retirement goals, lifestyle preferences, or tax implications that may impact your pension strategy. Lastly, seek professional advice from a qualified financial advisor who can provide personalized recommendations based on your circumstances and objectives.