Retirement Planning FAQ

The Contributory Pension is paid to people from the age of 66 who have enough Irish social insurance contributions to qualify. This is being pushed out however and rises to 67 in 2021 and 68 in 2028. The Contributory Pension is not means-tested, and you may have other income such as a personal or occupational pension and still receive the contributory pension.

Withdrawing your funds ahead of time is not encouraged and is often only allowed if there is a case of ill-health, such as that caused by a long-term disability. If this is the case and you are experiencing a serious illness, then you can access your personal pension at any age. Otherwise, if you want to access your pension early, you must wait until you’re 50 to draw it down if you are in an occupational pension scheme and you must be 60 in the case of a PRSA (50 if you’re an employee and leaving service) or a retirement annuity pension.

Tax relief is available at your marginal (higher) rate of income tax. So, if you’re a 40% tax-payer, then every €1,000 contribution is only costing you €600, the State pay the other €400 into your pension for you. Put another way, that’s a 66% straight up-front return.

A pension is basically a deferral of income and income tax rules continue to apply even when you are retired. However, as you get older, there are generous exemptions and depending on how much your income in retirement is, will determine how much tax, if any, is paid on your retirement income. Additionally, even after taking a tax-free lump sum of up to €200,000 

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