Pension for one spouse only.

Q

qwerty5

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I've a pension where I work and my employer contributes.
My wife has no pension in her job and no private pension.

Our thinking is to put the maximum that we can into my pension. I'm just wondering if there's anything we need to consider or worry about.
If I died tomorrow would the funds in the pension automatically go to my wife? If we both died would it automatically go to our estate (kids).
Do we need to mention this in our will or is it automatic?

Or is there any benefit of my wife taking out a private pension?
 
If you die before retireing, the funds will become automatic part of your estate. At least in my OPS I can assign a beneficary. Makes it easier should anything happen.

On what tax rate are you and your wife? If your wife is at the higher rate and you at the lower it makes definitely sense that your wife also takes up a private pension to maximise tax returns.
Are you already maximising your contributions? If so this would also speak for a private pension for your wife.
 
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Up to 4 times salary is paid as a lump sum, the remainder is used to purchase an annuity. Eg. salary of €100k, pension of €500k = lump sum of €400k and €100k used to purchase an annuity. The surviving spouse does not have to purchase an annuity immediately. They can wait until their are older and rates are better.

If you start a pension for your wife, for personal pensions and PRSA's, the full value of the fund can be paid over tax free.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
I'm sure the idea of your marriage splitting up is not one you want to consider but if all your pension contributions as a couple are in your name, and your marriage splits up, your wife will have to negotiate with her ex and possibly the courts to get her fair share of the pension.
 
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