Are you covered? 15% DISCOUNT AVAILABLE

The very thing we often overlook to insure is ourselves and our families.

SPECIAL DISCOUNT OF UP TO 15% for life and serious illness cover.

Offer ends soon!!

Call us today on 053 91 22714

David Maher: 086 1700120

www.wexfordfinancial.ie
email: info@wexfordfinancial.ie

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Mortgage Protection Special Offer*

Mortgage Protection Special Offer* for the month of February 2015

At Wexford Financial Services Ltd., we have a very SPECIAL OFFER from Royal London (formerly Caledonian Life).

If you have or know of anyone who has a mortgage on their home or a business loan then we may be able to make a significant saving on the premium you or they are currently paying on a Mortgage Protection* policy.

For February 2015, Royal London will match the cheapest Mortgage Protection price on the open market plus give a further 10% reduction. In addition, they will give first month’s cover for FREE!

We only need very basic details to quote. In most cases we should know very quickly whether a saving can or cannot be made. For anyone looking to cut back on OUTGOINGS it’s well worth checking out. We are getting a huge response on this and we only have two more weeks so
PLEASE HURRY!!

*This offer applies to Death Benefit cover only i.e. not to policies with serious illness. Term of policy needs to be a minimum of 10 years. It is not being extended to anyone with an existing Royal London (Caledonian Life) policy.

David Maher BA, ACII, QFA
Life and Pensions Director
P: 053 91 22714
M: 086 1700120
E: david.maher@wexfordfinancial.ie

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Movember Promotion – Cancer Cover

Movember Promotion – add Cancer Cover of €10,000 as a benefit for an additional 1c per month

To tie in with the Movember fund-raising campaign, Zurich Life has launched a great value for money promotion that we feel may be of interest to you.

For the month of November anyone who takes out a term assurance policy, with life cover of €100,000, is entitled to add Cancer Cover of €10,000 as a benefit for an additional 1c per month.  What this great offer means is that a person may take out the cover now and hold the cover for 20 years but only pay 1c for the €10,000 Cancer Cover for the entire duration of the policy!

Let’s take the example of a 35 year old male non smoker who decides to avail of the offer.  The cost of the life cover for 20 years is only €10.10 per month.  But now for €10.11 each month he is covered for €100,000 life cover and €10,000 Cancer Cover.  Not a bad deal!  Particularly when some companies are charging €20.20 (exactly double the premium) for just €100,000 life cover.

To find out more about this fantastic offer please contact David or Eleanor at 053 9122714.

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Life Insurance – Costs per month?

Life Insurance – What cover will I get for a tenner a month?

Life Insurance has never been better value for money. There are various contributing factors for this but I won’t go into these here.

For this post I thought I’d do a little piece about entry cost level for life assurance policies that we have available. The entry cost for life insurance from Wexford Financial is a mere €10.00 per month!

So what do you get for your tenner?

Well this will depend on your age, whether or not you smoke and the length of time you wish to hold the policy for.

For ease of comparison I have prepared a table below that shows the level of life insurance cover available for a single life level term assurance policy over 10 years with a conversion option.

The conversion option allows you to take out the cover again when the policy ends without the need for fresh medical underwriting. Please note in each case the policyholder is a non-smoker. The rate is the same for males and females.

Starting Age Sum Assured Policy End Cost per month
20 €175,000 Age 30 €10.19
30 €155,000 Age 40 €10.00
40 €  90,000 Age 50 €10.37
50 €  36,000 Age 60 €10.18
60 €  12,500 Age 70 €10.15

You will note that the cover on offer obviously decreases the older the proposer for life insurance is. This is because life insurance is more expensive the older you get.

Please note that we are not recommending the above levels of life insurance for these particular ages. This exercise is simply for illustration purposes but it is based on real quotes comparing the different market providers Sept. 2014.

Life insurance is very affordable as the above illustrates. The amount of life insurance that you need will depend on different factors.

If you would like more information on our range of low cost life insurance options or guidance on the level of life insurance you should have then feel free to get in touch.

David Maher ACII, QFA
Life and Pensions Director

P: 053 9122714
M: 086 1700120
E: david.maher@wexfordfinancial.ie

Request a Quote from Wexford Financial Services

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Inheritance Tax

Since 2008 Capital Acquisitions Tax (CAT) has increased from 20% to 33%. This is the rate at which gifts and inheritances are taxed (CAT).

Over the same period we have seen a dramatic reduction in the tax free thresholds of over 50%, most particularly with the Group 1 – children’s threshold – being reduced from €542,000 to €225,000 during this time period.

Therefore, not only has the rate of tax increased on that portion of your inheritance that exceeds the threshold but also the reduced thresholds means that a greater portion of your inheritance will now fall into the taxable inheritance net. Thus a classic ‘Double Whammy’.

Let me explain in a bit more detail using a comparison example of how a similar inheritance would be treated in 2008 versus 2014. Be warned, this may make for uncomfortable reading! Read More »

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Cohabiting couples and Life Cover

We are discovering that most cohabiting couples are unaware of their potential tax liabilities should there be a death claim on a life cover policy they may hold. According to the Central Statistics Office cohabiting couples are by far the fastest-growing type of family unit in Ireland. The latest statistics available from Census 2011 show there are over 140,000 cohabiting couples in Ireland, of which approximately 60% have children.

The likelihood is that although these people are not married, they will have or will want to have financial protection in place such as life cover, to ensure security for their family and/or partner, in the event of the premature death of either partner.

Wexford Financial Services Ltd. feels that many of these people may be under the false assumption that, if either of them were to pass away, their partner would automatically be entitled to the proceeds of the deceased’s life cover policy tax-free. However, the reality is far more complex, and the remaining partner may face a major inheritance tax bill.

For example, let’s examine a co-habiting couple who own a life cover policy in both names where only one of the couple is paying the premiums. The sum assured is €400,000 in this example. In the event of death of the policyholder who was paying the premium, the surviving party would potentially be liable for an inheritance tax bill of €127,025 as they have not paid for any of the life cover premiums themselves. This is because, as a cohabiting couple and, as such, not married or in a civil partnership, they will be treated as ‘strangers’ under tax law. So any policy claim pay out above €15,075 will be liable for Inheritance Tax at 33% hence a staggering tax bill of €127,025 (Based on our understanding of Tax Law 2014).

However, we offer a simple and legitimate solution for cohabiting couples to ensure their life cover offers the financial security they need. This is called arranging cover on the ‘Life of Another’ concept. In other words, if each partner takes out a life assurance policy on their partner’s life and pays the premium from their own bank account and income, there would be no tax liability. In this ‘Life of Another’ scenario it would be deemed that the surviving partner paid for the benefits and therefore is entitled to the proceeds tax free.

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Reaching your Number in Retirement

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Reaching your Number in Retiremen

In my last blog I outlined how a fairly modest retirement could cost €31,320 p.a. But if you are somebody working in the private sector how much should you be saving each month to meet this target level of income?

There are different factors that will ultimately influence the size of your fund at retirement and some of these can be summarised as follows:

- Date at which you commence saving and overall savings term to retirement.
- How much you save towards retirement during your working life.
- The rate of return you receive on your savings.
- Impact of contract charges on your pensions savings policy.
- The annuity rate you receive in exchange for your retirement fund.
- Age at which you draw retirement benefits.

Take a look at the following table which uses different starting ages and shows the monthly contribution required to provide an annual pension in retirement of €19,360 p.a. (today’s value) which when added to the State Pension of €11,960 p.a. results in the annual income (today’s value) of €31,320 p.a.

Starting Age Gross Contribution Net Contribution – 41% Tax Relief Net Contribution – 20% Tax Relief
25 €550 €325 €440
30 €613 €362 €490
35 €694 €409 €555
40 €858 €506 €686
45 €1100 €649 €880
50 €1450 €856 €1160

Assumptions:

  • Retirement Age of 68
  • Target Annuity of €19,360 p.a. in present day values.
  • Single life indexing Annuity – increases by 2% p.a.
  • Annuity has guaranteed payment period of 5 years.
  • Gross annual return of 6% p.a. assumed.
  • Standard PRSA pricing model used for the purpose of this illustration.
  • Contributions increase by 3% p.a.
  • Inflation of 3% p.a. used to give present day values.
  • Current annuity rates used for illustration purposes.

Tomorrow’s Blog will highlight the valuable tax relief available for retirement funding.

For more information on planning pensions please contact me at david.maher@wexfordfinancial.ie.

David Maher
Life and Pensions Director

Request a Quote from Wexford Financial Services

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What’s your Number?

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What’s your Number?

We have already seen in my last Blog how according to the European Anti Poverty Network (EAPN) the “at risk of poverty line” is an income of €12,400 p.a.

But how much do you need to have a secure and comfortable retirement? In other words what is your number ?– the income figure that you would be happy with in retirement.

In Wexford Financial Services we have examined this, in conjunction with Standard Life, and the following is what we feel would be a good standard of living in retirement.

•Annual Holiday Abroad for 2 weeks €2,700
•Annual cost for running car* €6,600
•Health Club / Golf Club Annual Membership €800
•A concert, play or show once every month €1,600
•Weekly dinner with friends or weekly drinks €1,820
•Shopping Trips for you and family** €2,400
•Home Improvements / Repairs / Re-decorating €3,000
•Basic Standard of Living as covered by EAPN €12,400
Total €31,320

*This is the cost of running the car when an upgrade every 5 years is taken into account.

**This includes birthday, wedding and Xmas gifts for family and friends as well as treats for

you.

In my next blog I will outline the pension contributions required to meet this income in retirement.

For more information on planning pensions please contact me at david.maher@wexfordfinancial.ie.

David Maher

Life and Pensions Director

Request a Quote from Wexford Financial Services

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Is the State Pension Enough for you?

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Income Requirement in Retirement

The European Anti-Poverty Network (EAPN) in Ireland has estimated that the “at-risk of poverty line” (in terms of income for an individual), stands at €238.69 per week.

The €12,400 figure (€238 x 52) represents the basic minimum income required to ensure an acceptable standard of living.

It’s based on a single retired person whose mortgage has been paid off.  It includes basic health related costs and household services, as well as a range of items for social inclusion and participation, like occasional visits to the cinema and public transport.

The €12,400 figure is only an indication. Everyone’s idea of what constitutes an acceptable standard of living is different and yours may well be above this figure.

Source: Minimum Income Standards Essential For Social Protection and Recovery, September 2010 http://eapnireland.wordpress.com/tag/poverty-and-minimum-income/

The State Pension is not Enough

If you read my last blog you will know that the State Pension in 2013 for a single person is €11,976 p.a.  With an adult dependent over 66 this rises to €22,703.  This falls below the €12,400 per individual detailed above.

So unless you have additional income available from a private pension or another asset, such as an investment property,you could be faced with a retirement that is close to or less than the “at risk of poverty line” figure.

In my next blog I will show you just how much income you may require to live a relatively modest retirement.

For more information on planning pensions please contact me at david.maher@wexfordfinancial.ie.

David Maher
Life and Pensions Director

Request a Quote from Wexford Financial Services

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Defusing the Pensions Time Bomb

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Defusing the Pensions Time Bomb

The expression Pensions Time Bomb is very accurate because as our working life ticks down to retirement many people are ill informed and ill prepared for their retirement.  And although the results may not be explosive, no doubt many people are in for a shock when they reach retirement.

There are perhaps 3 different factors that, when combined, best sum up the Pensions Time Bomb.  Please read on to gain a better understanding.

1) On reaching retirement age you will suffer a drop in income.  But by how much?

The State Pension (Contributory) is €11,976 p.a.  With an adult dependent (over 66) this rises to €22,703 p.a.  When we consider that the average industrial wage (CSO 2010) IS €36,372 then for a single adult dependent on the State Pension the reduction in income will be -67%.  For an adult dependent the drop will be -37%.

And if you are used to earning €60,000 then the reduction will be even greater – -80% for single State Pension and -62% for dependent adult.

2) People can expect to live for longer when they retire in the future.  This means that your pension will need to last you longer which means you will require a bigger pensions pot to begin with.

The following Life Expectancy table illustrates how long we can expect to live (according to CSO 2009 figures).  This is likely to further increase as advances continue to be made in the field of medicine.

Male
Expected Life Span
Female
Expected Life Span
Age 60 20 Years 24 Years
Age 65 16 Years 20 Years
Age 70 13 Years 16 Years

So for example if you are aged 65 and male you have a 16 year life expectancy.

3) Cost of Delay

The maximum pension you can fund is 2/3rds your final salary.  It is estimated that a 30 year old would need to fund 25% of salary to provide a pension of 2/3rds final salary that a) increases each year by inflation and b) provides a matching spouses pension on death.  A 45 year old would need to contribute 49% of salary to achieve the same pension.  Source: Irish Life.

Of course not everyone will be in a position to fund for a pension of 2/3rds final salary.  However, the earlier you start saving towards retirement the longer the investment timescale for your pension contributions to grow.

For more information on how to defuse the Pensions Time Bomb please contact me at david.maher@wexfordfinancial.ie.

David Maher
Life and Pensions Director

Request a Quote from Wexford Financial Services

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