Can I cash out / encash two small pensions

wailim_2002

Like many colleagues in similar line of work, I have moved job so many times that honestly I've lost track!

In some of these companies I had no pension or was not a member of the scheme.

However, with two companies I did have a combination of employee + employer contributions into a defined contribution scheme.

For 1 of the pensions, upon leaving service I took out my employee contribution and the remaining employer contributions were transferred to a buy out bond. This is currently with Zurich Life

For the other pension, I took no action on leaving but instead have become a deferred member of the schema with Invesco.

The size of these is small. Large enough to perhaps use as a large deposit against a car but small enough that the annuity would be like a fiver a week. What's the point of that?

I've read and read and read and so I know at age 50 (rapidly approaching) I can encash some or all of these. However I cannot get past this 25% business.

Am I really forced to buy an annuity for 20 years with amounts so small it does not really make sense? Or can I encash both in full and pay my marginal rate of tax the day after my 50th?

I'd appreciate solid opinions and I'm not at all interested or open to persuasion about transferring them into PRSAs or another pension scheme etc. My mind is very clear. I just want to take whatever cash out that I can recover now and pay the tax man his cut :)

In case its relevant, I intend to continue working for at least another 10, 15 years. However I do not have any other Pension and do not intend to open a new one.

Thanks for any advice or links to solid info which says: Yes, you can encash the lot! :)

Its odd that in other jurisdictions like UK / US they explicitly have a 'small pension' exemptions which allows you to cash out everything immediately when eligible at 50 but I just cannot find similar black and white print in Ireland

Henry Ford III

Annuity isn't mandatory - You can go down the ARF route. These carry risk though so get proper advice.

Trivial pensions are under €30000 in total. You can draw all of those subject to tax. First 25% is tax free.

p.s. If you look at the salary and service route your tax free lump sum may be increased. Think carefully about cashing out at 50 though - how will your overall pension position be at say 65?

Kewreeuss

Are the trivial pensions subject to tax if you cash them in after 65, or after your Social welfare kicks in or only if you do it before these dates?

Henry Ford III

https://www.boards.ie/discussion/comment/117776164#Comment_117776164

At any time.

beachhead

https://www.boards.ie/discussion/comment/117777812#Comment_117777812

You can try claiming back the 25% tax after retirement age-now 66yrs depending on all your other income.State Pension basic e12,900 per year,Dependant payment,other pension income.If,all income is less than e18,000 for a single person or 36,000 for a couple you could some kind of refund.If,your partner has no income of their own then you have an allowance of e36,000 to play with

The J Stands for Jay

https://www.boards.ie/discussion/comment/117778215#Comment_117778215

Wut?