From your twenties to your sixties and beyond, few financial decisions shape your future more than your pension …
Make Every Decade Count, the initiative launched this year by Goodbody and THE GLOSS, encourages women to think about their financial lives in ten-year chapters rather than through a single long-term goal.
Each decade brings different priorities, opportunities and challenges. Yet one financial asset has the potential to support every chapter of life: your pension. Pensions are not simply about retirement. They are about building financial resilience for whatever the next decade brings.
WHEN LIFE DOESN’T GO TO PLAN
Financial planning is often portrayed as a straight line. In reality, life is anything but predictable. Certain events can bring your pension sharply into focus and have a significant impact on your long-term financial position.
Redundancy is one example. While statutory redundancy payments are tax-free, if you receive more than the statutory amount, this may be taxable. Revenue also links the taxation of redundancy payments and pension lump sums, creating complexities around the exemptions available.
Terminal illness is another situation where pension planning can have a profound impact. Few people realise that trustees may be able to pay out an entire pension fund at a preferential tax rate where life expectancy is less than 18 months. There may also be steps that can improve outcomes for beneficiaries.
Divorce can also reshape a person’s financial future. After the family home, a pension is often the most valuable asset involved in a settlement. However, pensions legislation has evolved significantly and can create unexpected tax consequences when benefits are divided between spouses.
These situations are reminders that pensions are not simply retirement products. They are a cornerstone of broader financial planning, and the decisions made during significant life events can have lasting implications for your future financial security. Seeking specialist advice can help ensure important considerations are not overlooked.
PENSION THINKING THROUGH THE DECADES
Perhaps the greatest advantage of decade thinking is that it makes long-term planning feel more achievable. Rather than asking, “Will I have enough for retirement?”, it encourages a more practical question: “What should I be focusing on in this chapter of my life?”
The priority is awareness. Since the introduction of My Future Fund, all employers must offer you access to a pension and contribute towards it. However, not all arrangements operate in the same way. Some employers may offer an occupational pension scheme instead of auto-enrolment and these often include vesting periods, typically two years, before employer contributions become yours. Many people unknowingly lose valuable pension benefits by changing jobs before that point. Under My Future Fund, employer contributions belong to you from day one.
For many people, this is the decade of competing financial priorities. Mortgages, childcare and everyday expenses can make pension contributions feel difficult to prioritise. Yet this stage often coincides with career progression and salary growth. Even small decisions, such as directing 20% of all future pay rises towards your pension, can create meaningful long-term benefits. It is money you do not yet have and therefore are unlikely to miss.
This is often when pension assets start to feel more meaningful. Now is the time to review pension arrangements from previous employers and consider consolidating them into your own name through a personal pension structure such as a Personal Retirement Savings Account (PRSA). You should also review the death benefits attached to your employment contract and ensure your trustees know who you would like to benefit from those assets by completing an Expression of Wishes form through your employer.
Retirement starts to feel less theoretical and more tangible. Turning fifty brings an often-overlooked advantage: it becomes possible to access legacy pension pots from previous employments without having to stop working. At the same time, financial commitments can begin to ease, creating more flexibility to save.
By now, pensions feature in almost every financial conversation. The decisions ahead can have a profound impact on your future wealth. At this stage, professional advice can be invaluable.
LOOKING AHEAD, ONE DECADE AT A TIME
The most powerful lesson from Make Every Decade Count is that financial confidence does not come from having all the answers. It comes from engaging with the right questions at the right time.
Pension planning is a perfect example. It evolves as your life evolves. What matters at 25 is different from what matters at 45 or 65.
Decade thinking is not about predicting the future. It is about preparing for it. Because when viewed over ten-year chapters, pension planning becomes less about retirement and more about creating flexibility, security and freedom throughout your life. And that is something worth investing in at every age.
To find out more about this topic, visit www.goodbody.ie.
This is a marketing communication. Goodbody Stockbrokers UC, trading as Goodbody, is regulated by the Central Bank of Ireland and Goodbody Stockbrokers UC is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Goodbody is a member of Euronext Dublin and the London Stock Exchange. Goodbody is a wholly owned subsidiary of Allied Irish Banks, p.l.c.