The Finance Bill 2024 is set to introduce significant changes to Ireland’s pension landscape. While the final details are still being finalized, it’s crucial to understand the potential impact on your retirement savings.
Key Changes:
- PRSA Employer Contributions:
- Capped Contributions: Employers can now contribute up to 100% of your annual salary to your PRSA.
- Tax Benefits: Contributions within this limit remain tax-deductible for employers.
- Maximizing Your Savings: To ensure maximum tax efficiency, it’s essential to stay within these limits.
- Standard Fund Threshold (SFT):
- Increased Limits: The SFT will gradually increase from €2 million to €2.8 million over the next few years.
- Higher Tax-Free Lump Sum: You’ll be able to withdraw a larger tax-free lump sum from your pension pot.
- Future-Proofed: The SFT will be adjusted annually to account for inflation.
- Auto-Enrolment:
- Mandatory Savings: A new auto-enrolment scheme will be introduced in 2025, making pension saving compulsory for many workers.
- Employer and Employee Contributions: Both employers and employees will contribute to the scheme.
- Government Top-Up: The government will provide a top-up contribution to your pension pot.
What This Means for You:
As these changes unfold, it’s important to consult with a financial advisor to assess how they may impact your specific circumstances. We can help you:
- Optimize Your PRSA: Ensure you’re making the most of your pension contributions and maximizing tax benefits.
- Leverage the SFT: Understand how the increased SFT can benefit your retirement planning, especially if you have a substantial pension pot.
- Navigate Auto-Enrolment: Explore your options and make informed decisions about your pension savings.
Don’t Let These Changes Catch You Off Guard. Schedule a consultation with our team today to discuss your financial goals and ensure a secure retirement.
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