In a previous blog we touched on how much you might need to accumulate to achieve financial independence. More recently we explored the concept of human capital and how leveraging it can lead to financial success for many individuals (and they can retire comfortably and stay comfortably retired).
Following on from our recent blog, ‘What’s your number’, this is a further exploration of the idea – namely, how do you get there, and more pertinently, what happens if something goes wrong?
We have regular conversations with clients about financial independence. How much do I need to accumulate before I have the option not to work? When can the money start doing the work?. For most people this is about having the option and not the obligation to work.
The State Pension becomes available starting at age 66. However, you have the option to defer claiming your pension until as late as age 70 if your 66th birthday is after the 1st January 2024, with a view to receiving a higher pension amount.
A topic that often comes up with clients is whether or not they should utilise the annual small gift exemption for kids. The small gift exemption is currently €3,000 per person so in the case of 2 parents they could gift €6,000 to each child without impacting their thresholds.
The amount of your State Pension (Contributory) will depend on the total number of weekly reckonable contributions (up to a maximum of 52 per calendar year) and the age at which you start claiming the pension.