Pension if retire early

You need to check the terms of your particular pension.

What is a pan occupational pension do you mind me asking?

Consider maximising AVC.

This sounds like my own situation. I'm hoping to get similar returns, maxed out on AVCs too.

I think it can go either way too. Some years you could have 21% growth while for others it could be minus figures. If there are some good growth years towards the end it might be an idea to then throw in some bonds.

I have a question about ARFs. Once you take your lump sum and leave the remainder to grow tax free in the ARF, is the tax free growth dependant on you being tax resident in Ireland for eternity?

My pot will far out size that of my partner so I will effectively be supporting them and thus forced into the higher income tax bracket annually. However I saw recently that the difference in tax bracket in Malaga was 21% jumping to 23% or something like that, compared to 20-40% here. It would be much better for my situation then to be tax resident there however I'm trying to weigh up the impact to tax free growth in the ARF.

Surely it can't be taxed as income in Ireland if you are properly tax resident somewhere else? Would it be the same with an annuity if you changed tax residency?

Not yet. I'm fifteen years away and still in the 'learning from internet forums' phase :)

Is that like deemed disposals?

Undoubtedly ill do that closer to the time. At the moment I'm just slowly formulating ideas.

I hadnt realized the ARF would be taxed as 'Irish Source' income until now. Is it impossible then to avoid the funds in our private pension being considered as Irish sourced? Can you purchase an annuity from a foreign provider and then it's not Irish sourced for example? Are there options to draw down the whole pension in a foreign jurisdiction before opting for annuity or ARF?

Looking at the @Sarah1916 looking to retire at 59 ir even early 50's an 800k pot is nowhere near enough. 800k pot in 15 years time is equivlent to about 550k in today terms assuming an average inflation rate of 2-2.5%.

In today's terms that is a lump sum of 120-140k or 13-14k a year to take you to 60. You woukd want substantial other investments to fund your retirement as well.

Retiring at 50 would require a pot of over a million even at present IMO. Average life expectancies are rising. An average person at 50 will live towards 90 years of age.

Yes, but you'd need to look into whether Spain considers all payouts from an Irish retirement savings arrangement to be "pensions and other similar remuneration paid in consideration of past employment", rather than just payouts in the form of periodic instalments. The Irish tax regime will let you take out a generous chunk of your fund as a tax-free lum sum; the rest is taxed as income as and when it is paid out. But Spain may — I don't know this — tax both the lump sum and the instalments as income. If so, that's like to more than offset any advantage you get from a lower marginal rate of income tax in Spain.

The other point to bear in mind is that retirement savings are a long-tailed affair. What matters here is not what current Spanish tax practice is, but what it will be at the time when you retire. That's unknowable, since you're only in your 30s. So the most you can do at the moment is make provisional plans; you'll need to review those — and be ready to change them — as you're coming up to actual retirement.

If Ireland changes the tax treatment of retirement savings arrangements, they will usually do so on terms that respect the expectations of people who have already paid in under the old rules, at least in relation to amounts they have already paid in. (Not always; it depends on the nature of the change and the circumstances in which is is made. But usually.) Most other countries take a similar approach. But most governments are much more cavalier about the impact of legal changes on the expectations of people who live in other countries, or who have invested in other countries. They don't take responsibility for having created those expectations in the first place, so aren't concerned about disrupting them. So any tax planning that depends on the dovetailing or co-ordination of the tax regimes of two different countries always has to be a bit provisional; it's more vulnerable to disruption by events that most tax planning is.

One way to approach this is to stress-test your tax planning by asking what happens if it doesn't work out. If, when retirement is upon you, it becomes apparent that your Spanish tax would actually be heavier than your Irish tax, would that affect your plans to retire to Spain? If it would, then don't buy the villa just yet, and make sure that you're contributing enough to your retirement fund so that, if you did retire in Ireland and pay Irish tax, you'd still have enough for the kind of retirement you'd like to have.

What sort of fees does that involve? I heard of charges like '1% of the portfolio' which I just wouldn't do..

Why 4-6% growth? If stocks deliver circa 10-11% annualized growth and the pensions is invested in high risk equities why would it not be 10%?

Genuine question. You can get nearly 4% in a bunq savings account and probably 5+% on t-bills, all risk free. Why on earth would a pension fund offer risky equity options if not chasing higher returns?

I'd say folks from Seanie Fitz' school might be looking for 40% returns.

Edit: I understood the 4-6% suggestion to mean pre-retirement growth of a pension fund but perhaps Jim is referring to ongoing growth in e.g. an ARF.

Jesus Bilbot! For the umpteenth time, go and talk to a properly qualified independent financial or pensions advisor. It's becoming clearer with every post that you need one.

Well I will at some point but I'm interested in drawing on the experience of learned Boardsies too.

Perhaps you're overreacting just a smidge?

E.g. In Vanguards recent quarterly report they indicated an expectation that Emerging Market growth would be 6-8% so it would make sense to me that a high risk equity fund targeting that market could easily produce 8%.

Its a discussion forum, for discussion..

I give up.

It's called 'safe' for a reason. And it isn't because people just prefer a lower return.

That is excellent return but you must bear in mind past returns are no guarantee in the future, AFAIR the ftse tracker gained 0 in the period 2000 - 2020 so nearly all them funds are guesswork, you can get lucky or end up losing your shirt.