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Pension lump sum question

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  • 16-03-2014 6:30pm
    #1
    Jaybor
    Registered Users Posts: 124 ✭✭


    I understand that when one retires, if they have a private pension they can draw down up to 1.5 times final salary tax free at retirement.

    But my question is, what determines final salary.

    Say I have a private pension and retire at 50.
    But I have enough savings that i dont need to draw down my pension until im 55. I would have no salary at all at 55, so how do I calculate what I can draw from my pension tax free at 55?


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    #2
    NewCorkLad
    Registered Users Posts: 957 ✭✭✭NewCorkLad


    Firstly if you are a sole trader with a private pension you would not be eligible for the 1.5 times final salary you would receive 25% of the fund value tax free dependent on revenue limits.

    If you were employed, it would be based on your salary when you left that employment.

    The 1.5 times final salary is also dependent on your years of service in that employment.


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    #3
    Browney7
    Registered Users Posts: 3,100 ✭✭✭Browney7


    Pretty sure the ARF option doesn't apply if you go the 1.5 salary route and you have to purchase an annuity


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