Retirement Options

While doing retirement planning

As you grow nearer retirement and enter another phase in your life you need to reassess your financial situation with various retirement investment options. It is important that your pension portfolio is invested in an appropriate suite of funds as you head towards retirement age.

At retirement, we look at all of your pension policies and retirement options from which we’ll plan the most effective way of drawing these down. There are a number of retirement fund options available to you, depending on your circumstances and the type of pension plan you have.

Tax Free Lump Sum:
The amount of tax free pensions and benefits you can take at retirement will depend on the type of pension policy you have. This may be 25% of the value of a personal pension/ PRSA or 1.5 times your salary for company directors. The maximum tax free amount you can receive is €200,000. Retirement lump sums between €200,000 and €500,000 will be subject to standard rate income tax. Any retirement lump sums greater than €500,000 will be taxed at your marginal rate as income, the Universal Social Charge, PRSI (if applicable) and any other charges or levies (‘’tax’’) will also be taken. Both the €200,000 and €500,000 limits include all retirement lump sums you have received since 7th December 2005.

THE BALANCE MAY BE USED AS FOLLOWS:

• Taxable Cash; You may be able to take the balance as a taxable lump sum subject to Revenue restrictions.
• Purchase an annuity; This is a secured income for life in exchange for all or part of the pension fund accumulated at retirement. The amount of secured income payable relative to the fund amount depends on a range of factors including age, interest rates etc.
• Approved Retirement Fund (ARF); This is an alternative to the ‘traditional annuity’. It is a personal retirement fund where you can keep your money invested as a lump sum after retirement after taking your tax free lump sum. Upon the death of the ARF/AMRF holder, the proceeds pass to the deceased’s estate.
• Approved Minimum Retirement Fund (AMRF); On retirement, you must invest a minimum of €63,500 in an AMRF if you do not already have a yearly pension income of at least €12,700 per annum (including state pension income) and do not wish to invest the 75% balance in an annuity. An Approved Minimum Retirement Fund (AMRF) is similar to an ARF, except you only have access to 4% of your capital per annum until you reach 75.