Nine Rules of Thumb for Planning your Retirement

If your objective in life is to have a stress-free, financially comfortable retirement, relative to your earnings, then the advice is simple. Join the public service. Public service pensions are the Rolls Royce standard. They're guaranteed by the State and the benefits, even though they are reduced for current entrants, are significantly better than those available in the private sector.

But if you don't join the public service, here are eight rules of thumb when planning your retirement.

1 - Don't rely on the state pension or winning the lottery. If you're under 54 you won't get the State pension until you're 68-years-old. Whether you are an Umbrella Director, have your own Personal Limited Company or are a member of a PAYE Umbrella, your PRSI contributions all qualify for the State Pension.

2 - Start paying into a private pension as soon as you can. The sooner you start, the more you'll have in retirement.

3 - Pay in as much as you can afford on a consistent basis. If you pay peanuts into your pension, expect a 'peanuts' pension in retirement.

4 - Take advantage of the tax relief.  Don’t forget that by saving in a pension plan are also availing of the very generous tax relief available which can be as much as 51% of your contributions

5 - Don't bet with your pension fund; invest it. There is a difference. Don't pile all your pension fund on one big bet. Diversify your investment as Granny was right to say don't put all your eggs in one basket.

6 - Keep an eye on your regular pension fund charges. Charges matter over the long term, particularly the regular charge made to your fund each year. Try to avoid paying more than one per cent a year in charges on your fund, if you can.

7 - Get good advice. Pensions are complex and good advice at the right time can really pay off later on.

8 - Don't have unrealistic ideas about when you can afford to retire. Life expectancy is increasing all the time. The number of Irish people aged 80 and over is expected to increase FVE FOLD in the next 30years. You should be prepared to continue working (maybe part time) until you get the state pension, which is now 68 for most of us. If you have ideas about retiring in your 50s, you'd better join the public service.

9 - Lastly always remember that Pension planning = Retirement planning. A well-funded pension is simply part of your overall retirement plan which can include other sources of income such as investment property, shares and personal savings. Robert Whelan  Robert is the Managing Director of Rockwell Financial and specialising in financial advise for Professional Contractors. Date: 3rd November 2014