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withdrawal of AVC PRSA

  • 20-01-2019 11:46am
    #1
    whizkid9
    Registered Users Posts: 109 ✭✭


    Hi I am on a fixd term contract with my current employer. I can make AVC contributions to save some tax. I am wondering What amount will I get back, incase of early retirement ? I am 37. Say If I retire at 55. Can I take the AVC money back?


Comments

  • #2
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,727 Mod ✭✭✭✭Henry Ford III


    Ask your financial advisor.


  • #3
    whizkid9
    Registered Users Posts: 109 ✭✭whizkid9


    Henry Ford III wrote: »
    Ask your financial advisor.

    :) I am thinking of getting the AVC from labrokers.com who dont provide advice since they dont take a cut


  • #4
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,727 Mod ✭✭✭✭Henry Ford III


    whizkid9 wrote: »
    :) I am thinking of getting the AVC from labrokers.com who dont provide advice since they dont take a cut

    Best of luck with that.

    p.s. Without proper advice your choice of product and investment will more than erode any advantage using a discount broker might give you.


  • #5
    Geuze
    Registered Users, Registered Users 2 Posts: 13,586 ✭✭✭✭Geuze


    whizkid9 wrote: »
    Hi I am on a fixd term contract with my current employer. I can make AVC contributions to save some tax. I am wondering What amount will I get back, incase of early retirement ? I am 37. Say If I retire at 55. Can I take the AVC money back?

    AVC benefits are taken at the same time as the main scheme benefits.

    How much is in the accumulated AVC fund depends on your conts and what funds/assets you bought with the conts.

    The benefits are usually taken as a tax-free lump-sum, but can also be placed into an ARF, from which an income is drawn.


  • #6
    Liam D Ferguson
    Registered Users, Registered Users 2 Posts: 542 ✭✭✭Liam D Ferguson


    An AVC PRSA is a complicated product and you should not invest in one without knowing what you're doing. The fund in an AVC PRSA must be taken in conjunction with the benefits from the main pension scheme. The combination of the AVC PRSA benefits and the main scheme benefits must not exceed Revenue maxima, which are calculated by reference to your salary and service with the employer. For this purpose, the definition of your salary is not necessarily your basic salary and you have options to choose salary periods coming up to retirement. The AVC PRSA fund can be withdrawn as a combination of lump sum (tax-free within limits) and/or annuity or Approved Retirement Fund (ARF).

    LABrokers provide an excellent service to those who know what they're doing and don't need any advice or explanations of the above. It's a very risky strategy going to any execution-only provider if you don't know how an AVC PRSA works and are happy to seek advice from anonymous posters on Boards.ie who may or may not understand it properly themselves.

    Before anyone thinks this is sour grapes or touting for business because I'm a broker myself, it's not. I know John Geraghty who owns LABrokers well and have huge respect for the man and the business that he has run for decades. I just think that it is a false economy going to any Execution-Only broker if you don't know what you're doing.

    In theory I can find out how to treat virtually any illness online. I'd save money by doing that rather than going to a doctor. But if I'm sick with something worse than a common cold, I'll go to a doctor.


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