Now that you have decided to retire it is time to think about options available to you on retirement. Its not quite as easy as simply taking out the money. The revenue has rules as to how much you can take tax-free and how much is to be deemed as taxable income. There are also different rules for different types of ‘pension pots’.
It is essential that financial advice be sought at this time. Otherwise a retiree may pay more tax than they should. It is also essential that revenue rules be taken into consideration when taking out the pension to ensure that you are not going to be paying more tax than is necessary on retirement. Rockcourt is on hand to guide you through every step of the process and ensure you will receive the maximum tax-free lump sum and get the maximum pension you are entitled to while keeping your taxes to a minimum.
Options on Retirement
Depending on the type of pensions savings you were in during your career will depend on how you access your pension pot on retirement. For people without occupational pension schemes, it is about accumulating as much as possible in a pension pot. In this scenario the following chart indicates how you can access your pension pot:
However if you were in an occupational pension scheme, such as the public sector, the revenue allow you to access your pension pot differently. For example a teacher with a Pensionable remuneration of €60,000 and 25 years of service with a pension pot (PRSA AVC) of €50,000 can access more tax free from their PRSA AVC:
As you can see from the above there are several options available on retirement on how to get access to your pension, namely:
- Approved Retirement Fund (ARF)
- Approved Minimum Retirement Fund (AMRF)
- Taxable Cash
There are advantages and disadvantages to all of these so making the correct decision will either enhance or diminish your financial health on retirement.
How Rockcourt can help?
Rockcourt will ensure that you attain the most amount of money from your pension pot tax-free. As impartial advisers we will also explain all the retirement options available to you, and advise on the one that’s most appropriate to your needs, taking into consideration the revenue rules on how to access pensions. Lastly we will keep you updated on changes in legislation that may have an impact on you, for example, the change in Budget 2013 where the rule on minimum guaranteed income has been rescinded until 2016, enabling thousands of pensioners more access to their pension pots.