Pensions - What Should I Do ?

David De Souza asked:


You have worked hard your whole life, and have been taxed every step of the way. If you are thinking of retiring, here are five options to consider:

1. Cyprus

In number 1 spot is Cyprus. It tops the list of exotic destinations mainly because it has an income-tax rate of only 5% on all pensions for retired residents, as well as low property prices and no inheritance tax. It is also favored for its hot, dry summers, warm winters as well as its English speaking population.

The average price of a two bedroom property in Cyprus is only $77,000, though the islands property market is quickly catching up with prices in more established retirement hotspots such as France and Spain. Many see this as a benefit though, looking to Cyprus as a good place to invest in property, considering the state of the housing market in the rest of the world.

With southern Cyprus recently joining the European Union, pensioners from other EU countries are entitled to use the public health system free of charge, providing another financial incentive.

2. Panama

Panamas main attraction, (not including its year-round 30 Deg Celsius temperature), is the fact that English is widely spoken among the population, you have worked hard enough through your life, you do not really want to be learning a new language when you retire! There are numerous other benefits including a lower cost of living compare to Cyprus and other countries listed, a minimal crime rate and, for retirees, its pensio-nado scheme which offers numerous discounts on services including as healthcare, leisure activities and public transport. Another advantage is that Income from capital outside of Panama, whether they be your pension, bank deposits or your investment portfolio, is completely free from tax.

Do not presume you will escape tax altogether, however. There may be no inheritance tax as such, however, gifts of property attract rates from 4% to 33% depending on your relationship with the beneficiary, so make sure that you check before considering any such gifts. Anyone purchasing property may apply for permanent residence in Panama, one year after having applied for a residence visa, as long as the total value of the property and any bank deposits equals in excess of $200,000.

3. France

The country with the best quality of living on the list has to go to France. Despite the obvious language barrier, this will easily be made up for with the culture and cuisine this amazing country has to offer. If you are planning to retire with a large income, then France might not be the best option as the top rate of income tax in France is 49.8%, however retired couples with income of $70,000 or less would still be better off making the move because in France there are lower rates the lower your income.

Housing prices have increased dramatically in recent years, but this increased cost will be made up for by one of the best health care systems in the whole world. Something you really might need to consider when you reach retirement.

4. Belize

Belize has a tropical climate with temperatures ranging between a steady 24 and 27 degrees Celsius, however people should be aware of Belizes rainy season, which is likely to put some people off.

Despite this, however, it has always been a popular destination for American retirees. The income tax rate for citizens living in Belize is set at a low 1.75%, but income such as pensions is completely untaxed. On top of this there is no capital gains tax or inheritance tax for people looking into retiring to Belize. For those who can not wait until they are 65 there are advantages to early retirees also.

Investors in the island can direct foreign business activities from the country, as long as they have an income of $2,000 a month and are at least 45 years old. They can also import a car, light aircraft, boat and any personal belongings duty free. Compared to other places in the Caribbean, Belize is quite reasonable for property prices, with a 3 bedroom, beachfront villa costing $350,000. Anyone who is aged 45 or over can apply for residency through a retirement programme set up by the Belize government.

5. Spain

Spain is similar to France in that it has a good number of British speaking communities dotted around the country and it is one of the most popular retirement destinations for English people.

There are however a number of tax traps for those thinking of selling their property and moving to Spain which is why it has taken 5th place. If you are resident of Spain (I.E. spend more than 183 days there a year) you must pay tax at up to 40% on any income from your UK pension, bank accounts and investment portfolio. Capital gains tax may have been reduced last year from 35% to 18% however there is also a wealth tax of 0.2% to 0.5% of all citizens worldwide assets to consider.

One final thing for expats to consider is that they are liable to pay Spanish inheritance tax, regardless of the country in which the inheritance is situated. Spain is a wonderful, stable country, with an amazing culture but the above tax implications should be a big consideration for anyone thinking about retiring there. A Typical property will cost you around $137,000 and property costs amount to around 10%, which is higher than in many other countries.



Logan

Anthony Woods asked:


Pension’s Tips: It is said that people either “live too long or die too young”, and nowhere is this more typified than in the Construction Industry, where up to recently, both the safety record and the Pension planning record had been nothing short of appalling.

On the one hand, the fatality and injury record of workers in the Irish Building Industry was one of the highest in Europe (in 2001, 28% of all workplace fatalities were Construction Industry related), while those who were lucky enough to have survived working on Irish Construction sites faced a very uncertain future as they neared retirement.

While the authorities have made some strides in addressing the Construction Industries safety record in the recent past, there is still considerable scope for improvement with regard to adequate and proactive Pension Planning (in an IAPF survey dated October ,2005,it was found that nearly the entire Irish population was dependant on the state pension)While a recent IMPACT Trade Union report found that in Ireland, there are currently 5 people of working age for every person aged over 65, but that figure will fall to 2 to 1 by 2050,causing a huge funding crisis.

The lack of Pension planning is a symptom of a larger Irish malaise, namely their totally reactive nature to nearly everything. This especially applies to Construction Industry Pensions, where despite extensive publicity on the need for adequate Pension planning, the Pension expertise available and the negative effects of no Pensions being in place at retirement, excuses still abound for doing nothing. In an effort to be seen to do something, the Government is even rumored to being looking at making Pension funding compulsory.

In over 25 years of Pensions planning, here are the 7 most popular excuses I’ve come across in the Construction Industry for not planning a Pension.

* I can’t afford it

* I’m too young/old

* “Someone else” will provide for it

* I’ll do it “later”

* There’s a state pension

* I don’t want to think about it

* I’ll be dead by then

I can’t afford it — expansive pension ……ask yourself can you afford NOT to? Waiting until you can afford it will never happen. The minimum monthly premium for a self employed Pension is €25 gross, or with tax relief at 20%, €20per month ……that’s €1.00 per day. Given that the minimum Lottery ticket price is €1.50 per go, and there are absolutely no guarantees whatsoever with that, €1 is a small price to pay for securing your future and security of mind, isn’t it?

Insurance go first! I’m too young/old ….you’re never too young, or old for that matter, to start to proactively secure YOUR future. The earlier you start, the longer your funds have to grow and appreciate in value, while even starting much later in life will give you tax relief and help you to exercise SOME power over your finances.

A plan for my Pension? “Someone else” will provide it …………who, precisely? And why should they? While an employer may contribute to your Pension Plan, ask yourself how much of a benefit you’d expect to get, would it be guaranteed, and if so, for how long? Would you be happy to have “someone else” pick your clothes, choose your car or have any other say in your life - but if you don’t plan for your Pension, “someone else” WILL be deciding your future.

I’ll do it “Later …… look at the cost of delay - to provide a pension of €2,000 per month, a 20 year old would need to pay €270 per month into a pension plan, while a 40 year old saving for EXACTLY the same amount would need to pay €951 per month - FRIGHTENING, isn’t it??

There’s a State Pension …….there is alright. As of Jan, 2007, that stands at the princely sum of €209.30 per week. Now ask yourself, given the ever increasing cost of accommodation, transport, food, communications, entertainment etc., if you were relying on the State Pension ONLY, would you be LIVING or EXISTING?

I don’t want to think about it…….fair enough, that’s your prerogative, but burying your head in the sand on the Construction site won’t make planning for your future go away. Can you imagine a Builder deciding they didn’t want to think about something on a Construction site……would you be happy to work there?

I’ll be dead by then …perhaps you will, but suppose you’re not? Can you imagine HAVING to continue doing manual labor out of dire economic necessity? Or what if you’ve worked all your life and in spite of your best efforts, face 30 years of retirement?

Another alternative the Irish Government are looking at, as pointed out in a recent IBEC report in Feb 2006, is that they may increase the minimum retirement age to 70 or 75.Can you imagine the potential effect this would have on the Construction Industry? So, as an Irish Building worker, why don’t you take control of your future, ignore the 7 most popular excuses outlined above, and make your Pension THE KEYSTONE of your financial future……and if you need another incentive, try living on €209.30, and nothing else, for a few weeks!!!

For general pension’s information, please visit the website of the Irish Pensions Board or for Information relating specifically to Pensions visit Irish Construction Industry Pensions.

Ireland’s premier supplier of Pension and Retirement planning for those contractors, suppliers and sub-contractors who work in the Irish Construction Industry



Paige

B D asked:


With Lehman Bros. filing for chapter 11, what happens to retireee pensions and medical benefits? Will they just cease, will they be restructured, will they be untouched?

Any info would be very helpful, Thank you.

Emelia

Demitrius S asked:


I was terminated a while back, and I’m not sure about how pensions really work. I am 33 and I received a letter from my former employer saying I had a vested value of 9K. Can I withdraw that money now?

Aiden

w s asked:


please help me! can you give me more than one reason!

William

william c asked:


There should be no need to have to hire an attorney and lose 25% of your pension when you file for disability. I know several people who can’t work and are in danger of losing everything because Soc. Sec. will not grant them the pension they deserve. The entire process should only take one month to resolve not a year or longer. People can’t survive that amount of time with no income and no ability to work. This is a disgrace for our country. The opinion of two or three doctors should be all that is required to grant the claim. Most people who file are entitled to the pension and will eventually receive their money but in the meantime they lose their houses and their families break up from the stress involved. This is not the way it is supposed to be in the United States of America. We are supposed to have the right of life, liberty and the persuit of happiness. The government denies us those rights when we become disabled and we are denied our benefits for years.

Sofia

4Rabbitts asked:


I am 53 and not retirement eligible.

Jayden

Hazel asked:


Hi there…I think I have been doing our taxes incorrectly for the last couple of years.

We have one income, my husbands. He has been putting money into a pension and an annuity. Shouldn’t I have received a form from the bank that holds these two accounts saying what he put in there for the year of 2007? And if so, wouldn’t that bring my gross income down for the year, perhaps making my refund even larger?

Bartolome

Your bank belong to us asked:


“The folks who brought you the mortgage mess and the ensuing hedge fund blowups, busted buyouts, and credit market gridlock have another bold idea: buying up and running troubled corporate pension plans. And despite the subprime fiasco, some regulators may soon embrace Wall Street’s latest scheme.”

I’m gonna choke my senators if this shit goes through…
http://www.businessweek.com/print/magazine/content/08_33/b4096000769608.htm

Anna

Christopher F asked:


A major flaw with government today is that we have career politicians. When you run for an elected office it should be because you want to change the current state. It seems now a days that people that run for congress and senate run and do nothing and solve nothing. Which brings me to this. Why do people that we elect recieve pensions? Just because they served doesn’t mean we should have to pay for them to live well after they are done. What if they did a terrible job? Taxpayers still have to flip the bill for their pension. Thats not right if you ask me. If anyone agrees with me I would love to see what the public thinks, and if it is similar how could you get something like this on a ballot for the general public to vote on, so we could save our country money and cut down on the amount government has to shell out for ex-public servants? suggestions….I would love to hear them.

Caleb