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.
State Pensions are open to anyone resident in Ireland, regardless of whether the individual has made paid contributions or not. One is eligible for the State Pension after their 66th birthday. Prior to 66, a benefit payment is payable between ones 65th & 66th birthday.
The concept of pensions dates to the time of Julius Caesar in Rome. Fearful that retired soldiers may instigate an uprising against the Emperor, Caesar introduced ‘praemia’ for them. This paid soldiers a multiple of around thirteen times their final salary in a lump sum after twenty years of service. This initiative laid the groundwork for modern national pension systems worldwide.
We are often asked the question – ‘Is it better to invest a lump sum or drip it into the market over time?' From a pure return maximising perspective, the evidence suggests that investing a lump sum in one go is the most efficient way to invest.