{"id":1046474,"date":"2026-06-24T05:35:17","date_gmt":"2026-06-24T05:35:17","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/1046474\/"},"modified":"2026-06-24T05:35:17","modified_gmt":"2026-06-24T05:35:17","slug":"married-and-saving-for-retirement-heres-how-to-get-more-from-your-pensions-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/1046474\/","title":{"rendered":"Married and saving for retirement? Here\u2019s how to get more from your pensions \u2013 The Irish Times"},"content":{"rendered":"

You\u2019re married, have a mortgage, maybe you have kids, but nothing shows greater commitment than planning your retirement<\/a> together. This isn\u2019t just romantic, it\u2019s highly practical. <\/p>\n

Gaming things to make the most of your tax<\/a> relief, employer contributions and any age difference can really affect your comfort in your later years together. If you are going to stick together then a joint approach to pension planning can really pay off.<\/p>\n

Employer contribution <\/p>\n

With so many competing priorities for your money, you want to make sure any pension<\/a> contributions you can make are giving you the biggest bang for your buck. It pays to look at where your pooled money is going to have the biggest impact.<\/p>\n

Many employers offer matching pension contributions \u2013 so if you contribute 4 per cent of your gross salary for example, they will contribute the equivalent of 8 per cent from their own coffers. This is free money, so avail of the maximum employer contribution if you can.<\/p>\n

\u201cIt\u2019s part of your overall total compensation for your job, so it\u2019s important not to leave any money on the table,\u201d says Tessa Hayes, employee benefits consultant at NFP.<\/p>\n

[\u00a0How to not retire: what to do if you\u2019re going to keep working after 65<\/a>\u00a0]<\/p>\n

Ideally, you both want to be availing of the maximum matching employer contribution. But if your household\u2019s capacity is limited, and if one employer is offering a super-duper matching scheme, then it can pay for a couple to prioritise contributions to this pension, Hayes says.<\/p>\n

Doing this can garner your household more free money. <\/p>\n

Tax relief<\/p>\n

There is tax relief on pension contributions \u2013 more free money, and the relief is most generous for higher earners.<\/p>\n

Those earning \u20ac44,000 a year or more, benefit from 40 per cent tax relief on pension contributions. So, for example, if you put \u20ac100 into your pension then the full \u20ac100 goes into your pot, where it can grow and compound tax-free, and the Government will give you \u20ac40 back. That \u20ac100 contribution only costs you \u20ac60. <\/p>\n

Lower-rate tax payers, however, only get 20 per cent tax relief on contributions.<\/p>\n

\u201cIf your husband is earning \u20ac30,000 a year, that \u20ac100 contribution to pension is actually costing them \u20ac80,\u201d Hayes says. <\/p>\n

That\u2019s not to say a spouse earning less shouldn\u2019t contribute to a pension, but a couple committed to spending their retirement together might wish to play tax reliefs to their advantage.<\/p>\n

Age<\/p>\n

Is your spouse older than you? There are limits to the amount of pension contributions you can get tax relief on in one year based on your age. <\/p>\n

If your spouse has crossed the threshold of a round-year birthday into the next decade for example, and you have not, their pension contributions can qualify for more tax relief. <\/p>\n

In your 30s, you can get tax relief on up to 20 per cent of your earnings. In your 40s this rises to 25 per cent. Between the ages 50 to 54 you can get relief on 30 per cent of your earnings. From the age of 55 to 59 this rises to 35 per cent and to 40 per cent for those aged 60 and over. <\/p>\n

So, for example, if your spouse is aged 42 then they are entitled to get tax relief on contributions of up to 25 per cent of their income. That means someone earning \u20ac80,000 can get tax relief on annual pension contributions up to \u20ac20,000. <\/p>\n

[\u00a0The window to opt-out of auto enrolment opens in July: should workers stay or go?<\/a>\u00a0]<\/p>\n

If they are a higher-rate taxpayer then the tax relief is 40 per cent. So if they contribute the full 25 per cent of their income then \u20ac20,000 will go into their pension, but it will only cost them \u20ac12,000 as they will get \u20ac8,000, or 40 per cent, back from the Government.<\/p>\n

If you are aged 38 and earning the same amount, you can get tax relief on just 20 per cent of your \u20ac80,000 earnings. Contribute \u20ac20,000 just like your spouse, and your contribution will cost you \u20ac13,600 as you\u2019ll only get \u20ac6,400 back. That\u2019s a \u20ac1,600 difference. <\/p>\n

Similarly, if your spouse is aged 55 and you are aged 48 then they can get tax relief on 35 per cent of their earnings while you will get tax relief on 25 per cent. <\/p>\n

Few people will be in a position to contribute either 25 per cent or 35 per cent of their income in a single year, but in a bumper year it can pay to prioritise contributing to the pension of the older person. <\/p>\n

Time out<\/p>\n

Periods out of full-time paid work are common.<\/p>\n

In general, if you are a member of a work pension scheme and your salary continues during maternity leave then pension contributions continue as normal. With extended maternity leave or parental leave, an employer is not obliged to make contributions.<\/p>\n

Those on parental leave can mitigate the loss by continuing to contribute if they can afford it. Consider making even reduced contributions if you can.<\/p>\n

Generally, you cannot get tax relief on pension contributions if you have no employment or taxable earnings.<\/p>\n

For that reason, it can make sense to prioritise contributions to the working spouse\u2019s pension, where Government tax relief and matching contributions can be claimed. <\/p>\n

\u201cThis is where retirement planning is an overall household objective; you are not looking at it as two separate pots,\u201d Hayes says. <\/p>\n

\u201cDuring one spouse\u2019s time out of work, the other spouse could temporarily increase their contributions to offset where their partner isn\u2019t funding a pension. Perhaps they can look at maximising their tax relief.<\/p>\n

\u201cThat will help you to maintain your overall retirement plan, but of course moving down to a one-income household can also add its own pressures, so you have to look at the full picture.\u201d<\/p>\n

Someone planning to take time out of paid employment could decide to buffer their pension in advance, she says. <\/p>\n

\u201cYou could consider increasing your pension contributions before you go and increasing them or doing an AVC [additional voluntary contribution] to catch up,\u201d Hayes says.<\/p>\n

Taking leave from paid work or working part time will affect the number of PRSI<\/a> credits you need to qualify for the State pension. <\/p>\n

[\u00a0Just one in four people has a clear plan for retirement<\/a>\u00a0]<\/p>\n

You get these credits while on maternity leave. You\u2019ll get them if you take parent\u2019s leave and qualify for parent\u2019s benefit and if you take parental leave.<\/p>\n

Your employer must, however, write to the Department of Social Protection<\/a>, setting out the weeks you have not worked.<\/p>\n

If you take carer\u2019s leave and qualify for carer\u2019s benefit then you also get credits automatically.<\/p>\n

It\u2019s worth checking with the Department of Social Protection that you have sufficient contributions to qualify for the State pension.<\/p>\n

If one of you is not in paid work then be realistic about what your spouse\u2019s pension can provide. Ensure you understand the pension and get involved in decisions about it, particularly at drawdown, as this will impact your financial security for the rest of your lives.<\/p>\n

If the pension is in accumulation phase and the earner dies then the value should go to the spouse. If the main earner has already retired and dies then what happens to their pension depends on how they took their benefits on retiring. If they bought an annuity then the pension may die with the earner.<\/p>\n

If the main earner sets up an approved retirement fund (ARF) then this can be transferred to a spouse\u2019s name on the earner\u2019s death.<\/p>\n

How much?<\/p>\n

How much income will a couple need in retirement? It can be hard to put a figure on that, but having a target in mind can help you get there. <\/p>\n

\u201cIt\u2019s about asking, \u2018What does retirement mean for us?\u2019,\u201d says Kate O\u2019Flaherty, a certified financial planner with Ollie Moran Financial Services.<\/p>\n

\u201cFor some couples, it will be two or three cruises a year. Others will just want to down tools, go for a walk every day and read. Everyone is different.\u201d <\/p>\n

The maximum State pension is \u20ac299.30 a week, or about \u20ac15,566 annually, for those under age 80. <\/p>\n

To enjoy a \u201cmodest\u201d standard of living, a couple would need a retirement income of \u20ac28,800 a year, a 2024 report for the Pensions Council<\/a> by KPMG said. <\/p>\n

Couples wanting a \u201ccomfortable\u201d standard of living should aim for \u20ac43,200 a year. \u201cComfortable\u201d means a bit more financial freedom, some travel and discretionary spending, but still not an affluent lifestyle. <\/p>\n

If you both qualify for a full State pension, this will reduce the amount you need to self-fund to about \u20ac12,000 a year.<\/p>\n

By 2046, Irish men can expect to live to 85 and women to 89. So if you retire at 66 then you\u2019ll have to fund about 20 to 25 years of living after your last pay cheques. <\/p>\n

If you decide to take your pot as an annuity \u2013 that\u2019s a guaranteed income every year \u2013 a couple entitled to the full State pension will need a pot of about \u20ac276,000.<\/p>\n

With an annuity, however, if you die then the pension dies with you. Your spouse doesn\u2019t get it.<\/p>\n

An alternative is an ARF. This is where you control your retirement fund and can invest it in a wide range of investment funds. You can also make withdrawals when you need them. And because you own your fund you can leave it to your dependants when you die. <\/p>\n

When to retire<\/p>\n

At what age do you both plan to retire? If it\u2019s sooner than 66 then you will need to bridge the gap, O\u2019Flaherty says. Accessing your pensions early can have tax implications, too. <\/p>\n

In retirement, you can take up to 25 per cent of your fund as a tax-free lump sum, capped at \u20ac200,000. The remainder is used to buy an annuity or is moved into an ARF. <\/p>\n

\u201cThere is a personal tax-free threshold, but, unlike tax credits, this can\u2019t be transferred between spouses, so it\u2019s really important to structure both of your pensions as well as possible,\u201d she says. <\/p>\n

It\u2019s likely couples will have one or more inactive pensions from old jobs. This money can often be accessed from the age of 50. Couples might be earmarking this for college costs or clearing the mortgage.<\/p>\n

But once you move a portion of your pension into an ARF, Revenue forces you to withdraw at least 4 per cent of your fund\u2019s value annually from the year you turn 61, even if you don\u2019t need the money. This rises to 5 per cent from age 71. <\/p>\n

Even if you don\u2019t take the money out of the fund, Revenue treats this amount as an actual withdrawal and the mandatory 4 per cent is added to your annual income and is fully subject to income tax, USC and PRSI. This can result in a higher tax burden.<\/p>\n

\u201cYou could still be earning good money in your job in your early 60s, so you could end up paying way too much tax,\u201d O\u2019Flaherty says.<\/p>\n

Discuss what other sources of money there might be, too. <\/p>\n

\u201cInheritances are now being received in your 60s when you are on the verge of retirement. That money could go towards the mortgage,\u201d she says.<\/p>\n

Start talking about pension and saving for it as early as possible even if amounts are small, O\u2019Flaherty says. \u201cThe earlier you start, the longer you will be invested and you will get the benefit of compounding interest over time.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"You\u2019re married, have a mortgage, maybe you have kids, but nothing shows greater commitment than planning your retirement…\n","protected":false},"author":2,"featured_media":1046475,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3093],"tags":[51,104645,474,47339,2074,287755,2499,104644,2250,1200,16,15,596],"class_list":["post-1046474","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-department-of-social-protection","tag-finance","tag-money-matters","tag-pension","tag-pensions-council","tag-personal-finance","tag-prsi","tag-retirement","tag-tax","tag-uk","tag-united-kingdom","tag-work"],"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1046474","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=1046474"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1046474\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/1046475"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=1046474"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=1046474"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=1046474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}