Post Retirement Investments
When you reach retirement, you will have a number of choices to make with regard to your accumulated pension fund. These choices will depend on the type of your pension scheme / plan. We can advise retirees of the best combination of post retirement products for their retirement. We also design individual investment strategies for ARF (Approved Retirement Funds).
One of the main retirement benefits is to take a tax free lump sum from your accumulated pension fund. This will be either based on 1.5 times final salary or 25% of the accumulated pension fund. The maximum tax free lump sum is €200,000.
The traditional post reirement pension product is the annuity. This pays an income to the retiree until he or she dies. This option can also be taken in combination with a tax free lump sum.
See more » Pension Annuities
Another option that may be available to the retiree, is to transfer a portion of your accumulated pension fund to an ARF (Approved Retirement Fund).
The benefit of using an ARF is that your accumulated fund continues to be invested and grows in capital value, after you retire. The ARF also allows for the transfer of capital to an individual’s estate, after the death of the retiree. Recent changes to tax legislation have now ensured that even if there is no drawdown of income from the ARF, a tax liability will be assessed each year on an assumed drawdown value.
See more » ARF (Approved Retirement Fund)
Pension income or ARF withdrawals, are subject to income tax. It is usual for the post retirement pension provider to withdraw income tax at source, with the beneficiary receiving the net income.
If no withdrawal is made from an ARF, then there will be an assumed withdrawal % used in the calculation of the individual’s income tax liability.