Preparing for Retirement


Posted on: 28 September 2015 by Matt Stevens

The prospect of retirement form work provides an opening to seek fresh directions and new challenges in a new life set up. With this in mind, preparing for retirement gives you a chance to make the most of your time, adjust to the new challenges and budget for the financial security needed during retirement. It is therefore crucial to start preparing for retirement in advance.

How to prepare

As you enter 50’s, retirement is knocking around the corner, calling for a detailed preparation. Planning for this should not be left to last minute as it has always been with most people. There are several options to help you improve your life in retirement, nevertheless financial security is the key to this improved lifestyle.

You need the services of a financial adviser to help you set practical retirement goals based on your pension plan, if you have one. It is clear that the sooner you start a pension contribution the longer it has to grow, you can use online pension calculators to  get some insights. To help balance your pension retirement benefits, the system is set in a way that the older you are the higher the percentage of contribution to the pension scheme.

If you have made sufficient social insurance contributions in your working life, at retirement age (usually at 66) you may be entitled to the State Contributory pension. There are a number of guidelines for you to qualify for the State Contributory pension.

Qualifications for the State Contributory pension

1. Entry into insurance before a certain age

According to the Social Welfare Services, to qualify for this pension you should have started paying social insurance contributions before attaining the age of 56.

2. Must have a specific number of Social insurance contributions paid

There are four groups of insurance contributions as listed below;

· Full-rate contributions for those working in classes A, E, G, H, N and S.

· Modified rate contributions for those in classes B, C and D, usually public and civil servants.

· Voluntary contributions paid by people below 66 years who are no longer covered by the compulsory PRSI. However, there are a number of conditions for this

· Credited contributions commonly known as credits’. They are similar to the Social Insurance paid during employment. They are normally awarded at the same rate as your last paid social insurance contributions.

If you reached pension age after April 6th 2012, you will need a minimum of 10 years social insurance contributions to qualify for the State contributory pension. For a voluntary contributor who retired before April 6th 1997, you will need 520 full rate contributions. If you reached pension age after April 6th 2002, you must have a total of 5year contributions, though not necessarily consecutive. If you reached pension age before 6th April 2002 you will need a total of 3 years insurance contributions, though not consecutive as well.

3. Specific average number of annual contributions

To qualify for the State Contributory pension, the normal average rule specifies that you must have a at least 10 contributions on average to get the minimum benefits and 48 contributions on average to qualify for maximum benefits.

Based on the average annual contributions among the other factors mentioned above, the pension calculator will determine pension rates over a given period. This also varies depending on whether you qualified for pension before or after 1st September 2010.

Application for State Contributory pension

If you have been contributing the social insurance in only one country, you should apply at least three months before you attain the age of 66. However, if you have pain the contributions in more than one country, you are advised to apply at least six months before you turn 66. The applications should be submitted to the Department of Social protection, Social Welfare Services section.

Payment of State Contributory pension

When you apply for the pensions and get approved, it is up to you to decide how you want to get paid. It can be either in a lump sum or paid in small instalments as income. The State contributory pension benefits can be paid electronically into your bank account, you therefore need not to be residing in Ireland to receive them after your retirement.

For more info and details click here.


Retirement is a period to take a rest and enjoy the peace and tranquillity of lifetime investments. It is not the time to be anxious about financial insecurity and personal needs. This however, can only be realized with well-timed preparation through increasing catch-up contributions to retirement accounts and getting vital information on how to manage and enjoy your pension. Preparing for retirement is the right thing you can do for yourself and your loved ones who need to see you live happily way beyond your working age.

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