Boost Your Retirement Income
Boost Your Retirement Income with an AVC Plan
We all recognise the importance of providing a realistic income in retirement and by reviewing your pension contributions regularly you can identify if you are saving enough to fulfil your retirement goals.
If you want to boost your pension savings to provide a greater income in retirement an AVC (Additional Voluntary Contribution) could be the right thing for you. An AVC provides an excellent opportunity to make tax efficient optional payments. An AVC aims to enhance your benefits at retirement.
AVC – The benefits of topping up your plan
- Generous tax relief
- Maximise your tax-free lump sum
- Provide a higher pension income
- Make financial provisions for your dependants
- Have greater flexibility and control over your fund at retirement (ARF options)
An AVC is still one of the most tax efficient ways to save for your retirement.
Tax relief: You can normally claim up to 41%* tax relief on your contributions to your AVC plan.
Tax-Free Growth: Under current legislation the money you contribute is allowed to grow tax-free**.
Tax-Free lump sum: Part, or in some cases all, of your fund may be taken as a tax-free lump sum at retirement.
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Will you have enough income when you retire?
Warning: These figures are estimates only. They are not a reliable guide to the future performance of such an investment.
*41% assumes you are a higher rate tax payer. It is important to note that tax relief is not automatically guaranteed. You must apply to and satisfy Revenue requirements.
** You should however note that a temporary Government pension fund levy of 0.6% will be applied to the value of the pension assets for the years 2011-2014.
1. Present day value of pension payable in retirement. The pension available from the company pension plan assumes a total contribution of 15% of the gross annual salary to a defined contribution pension scheme. Salary is projected to grow at 3% p.a. and the investment return on the pension fund is assumed to be 6% p.a.
2. Present day value of AVC pension payable in retirement. The premium required (gross of tax) to provide €13,784 p.a. pension from an AVC is €525.85 per month (€310.25 per month after tax relief at 41% where applicable). Contributions are projected to grow at 3% p.a. and the investment return on the AVC fund is assumed to be 6% p.a.