PRSA Pension Retirement Options in Ireland What You Need to Know

PRSA Pension Retirement Options in Ireland: What You Need to Know

When it comes to PRSA pension retirement options in Ireland, there are a few things you need to know.

First of all, PRSAs are one of the best ways to save for retirement. They offer a wide range of investment options, and you can contribute as much or as little as you want. In this article, we will discuss the different PRSA pension retirement options available in Ireland, and help you decide which is right for you.

What Are the PRSA Pension Retirement Options in Ireland and What Do They Entail?

The Personal Retirement Savings Account (PRSA) is basically a long-term savings contract with substantial tax reliefs available to everyone under age 75. It was designed principally to be a pre-retirement tool that allows individuals to plan their retirement savings flexibly.

A PRSA Pension is retirement savings account that you can access when you retire, at any point between 60 and 75. You are entitled to a 25% lump sum (with the first €200,000 tax-free and the next €300,000 taxed at the standard rate of tax, currently 20%).

For the remainder, you have the option of choosing one of the following choices:

  • ARF (Approved Retirement Fund)

This is your pension fund and you are required to take an income every year. Any income you take is subject to tax at source.

  • PRSA Post-retirement 

You can retain your PRSA Pension Retirement in the form of post-retirement. PRSA (Vested PRSA).  This is similar to the Approved Retirement Fund, above.

  • Annuity

You can purchase a lifetime income from one of the insurance companies. The rate you receive will be based on your age and long term interest rates

  • A Taxable PRSA Lump sum

You can also take the remaining balance of your pension which will be taxed as income.

How Can You Choose the Best Option for Your Needs?

The PRSA Pension Retirement offers a great deal of flexibility to the saver. You must understand all of the options available to you before making a decision. If you are not sure which option is best for you, seek professional advice from a financial advisor.

When you have decided how you want to receive your PRSA benefits, you need to contact the PRSA retirement provider and fill out the necessary paperwork. You will also need to provide proof of your age, identity, and confirm if you have any other pension benefits.

What Factors Should You Consider When Making Your Decision?

There are a few factors you should consider when deciding how to receive your PRSA Pension Retirement benefits. First, think about how much income you will need in retirement. If you plan to retire early or have other sources of income.  You should also consider your health and life expectancy. If you think you may need your PRSA retirement benefits for a long time, an annuity may be a good option. It can provide a lifetime of income, even if you live to be 100!

Deciding how to receive your PRSA benefits is an important one. Be sure to consider all of your options and seek professional advice before you make a decision.

What Is the Retirement Age Under PRSA?

You are allowed to take your benefits once you reach age 60 and before age 75. If you are a member of your employer’s PRSA pension scheme then it is possible to start taking benefits earlier, for instance, when you leave employment after age 50. However, the benefits you will receive are likely to be less than what they would be when you reach the normal retirement age.

Can I Cash in My PRSA Pension Early?

In Ireland, accessing your pension fund before your nominated retirement age isn’t recommended and is usually only permitted in the event of a diagnosis of illness like that brought on by a chronic disability. If you are in this situation and you’re suffering from a serious illness, you may be able to access your pension fund. 

How Does Retiring With a PRSA Pension Plan Impact Your Life?

There are a few ways that retiring with a PRSA Pension Retirement plan can impact your life. First, you will need to decide how you want to receive your PRSA retirement benefits. You can take a lump-sum payment, an annuity, or a combination of both.

Your PRSA Pension Retirement Fund, when you retire, will comprise the total amount of contributions paid to you (and any employer contributions, should you have one) as well as the investment return that you earn from those contributions, less the PRSA fees charged by the provider.

This amount will be a great help upon retirement because it will supplement your state pension and any other income you might have. Newcourt Retirement Fund Managers Limited believes that PRSA retirement pensions are a great way to ensure a comfortable retirement!

Contact your financial advisor today to discuss your PRSA Retirement Options in Ireland!