Retirement Options

Options at retirement:

While not everyone has the same options at retirement, to keep this simple, typically a retiree who has built up a pension fund can do the following:

  1. Claim a tax free lump sum.
  2. Option to take an additional lump sum and pay tax on it.
  3. Choose to invest the balance of your fund in an Annuity or an Approved Retirement Fund (ARF)

Tax Free Lump Sum

Private pensions:  (i.e. Personal Pension Plans and PRSA’s that are not linked to a company scheme)

  • 25% of your fund balance can be claimed as a tax free lump sum.
  • Maximum lifetime limit of €200,000.

Occupational Pensions Scheme / Company Pension,

  • 25% of your fund balance or up to 1.5 times your final salary.
  • Maximum lifetime limit of €200,000.
  • The size of your lump sum will depend on your years of service under that scheme & by the scheme rules.
  • Due to scheme rules & years of service, working this out can be a little more complicated, so it’s probably best to have a chat with one of our Pension experts, who can calculate this for you.

Taxable Lump Sum

  • You have an option to take an additional lump sum and pay tax on it.
  • Currently, you can withdraw up to €300,000 as a taxable lump sum and pay tax at 20%.

Choose your pension type

There are two options for the remaining funds, after you take your lump sum:

  1. Buy an Annuity
  2. Invest in an Approved Retirement Fund (ARF)

Annuity:

  • An annuity is an income for life. You use the balance of your pension fund to buy a guaranteed income for life from a pension provider.
  • Once you purchase the annuity, you’ll get an income until you die but you won’t have access to the pension fund anymore.

Approved Retirement Fund (ARF)

  • An Approved Retirement Fund continues to invest your money after you retire.
  • You draw an income from the fund and you can increase or decrease the amount you withdraw per year depending on your requirements (subject to a minimum of 4% of the fund value per year).
  • When you die, any remaining funds in your ARF are left to your estate.

While these options have their own merits, there are some downsides for each that you need to also consider.  Our qualified pension experts can help you weigh up the pro’s and con’s of each option.

How do I get started?

  1. Have a chat with an Irish Pensions advisor – call (01)8570655, fill in the form below to arrange a call, or start a conversation using our Online Chat (click the icon on the bottom right of the screen).
  2. The advisor will ask you some simple questions to identify what type of pension will suit your circumstance.
  3. They will compare pension providers and fund managers to find the most suitable pension for you.

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Irish Pensions

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(01) 8570655