Retirement Facts

State Pension (2018)

State Pension (Contributory)/(Transition)        €230.30 per week [€11,976 p.a.]

Personal + Adult dependant (over 66)            €436.60 per week [€22,703 p.a.]

Personal + Adult dependant (under 66)          €383.80 per week [€19,958 p.a.]

 

Monthly cost of Annual Single Life Pension equivalent to €10,000 in today’s terms.

 IF YOU START FUNDING AT AGE

Retirement Age 60

Retirement Age 65

Pension @ 60

Initial Monthly Premium

Pension

 @ 65

Initial Monthly Premium

Gross

Net of 41%

Gross

Net of 41%

30

€24,273

€446

€263

€28,139

€306

€181

35

€20,939

€544

€321

€24,273

€375

€221

40

€18,061

€688

€406

€20,939

€458

€271

45

€15,580

€919

€542

€18,061

€578

€341

50

€13,439

€1,366

€806

€15,580

€772

€455

55

€11,593

€2,621

€1,546

€13,439

€1,148

€677

Assuming salary inflation at 3% pa and contributions increase at 3% pa

Figures assume premiums invested in a unit-linked fund with an average annual return of 6% gross, before charges. Unit linked fund values are not guaranteed and may fall as well as rise. Pension based on annuity rates available for a male single life pension, guaranteed 5 years, increasing at 3% pa in retirement, assuming 5% interest rate.


Compulsory Purchase Gender Neutral* Annuity Rates (guide December2012)

 

Single

Joint Life

Level

Increasing @ 3% pa

Level

Increasing @ 3% pa

Age60

4.22%

2.67%

3.82%

2.33%

Age 65

4.84%

3.28%

4.32%

2.83%

Assumed guaranteed 5 years in all cases.Joint life rates assume annuity reduces to 2/3rdand joint life is same age.*not applicable to Defined Benefit pension scheme funds

 

 Funding Occupational Pensions

 Maximum Ordinary Annual % x remuneration, for maximum approvable retirement benefits             

Current Age

NRA 60

NRA 65

Female

Male

Female

Male

30

67%

72%

49%

54%

35

80%

86%

58%

63%

40

100%

108%

69%

76%

45

133%

144%

86%

95%

50

200%

216%

115%

126%

55

400%

432%

173%

189%

Based on Revenue Practice guidelines (July 2008) for calculating the maximum ordinary annual contribution (employer + employee) payable in respect of a scheme member under all occupational pension schemes related to the same employment.Assumes member has no retained benefits or other retirement benefits related to the same employment, and will have completed at least 10 years service by NRA.

 

ARF requirements*

Guaranteed income:(in payment for life)

Or Invest in AMRF or Annuity 

(€12,700 pa)

(€63,500)

*assuming eligibility conditions satisfied

 

ARF Funds- tax treatment on death*

Funds to Income Tax Inheritance Tax
Spouse’s ARF No. Subsequent withdrawals subject to PAYE No. (Spouse exemption)
Child under 21 No Yes. Taxable Inheritance.
Child over 21 Yes. Subject to 30% income tax. No. Exempt
Other(Incl. to spouse directly) Yes. Treated as income of deceased in year of death. By default QFM deducts higher rate income tax at source under PAYE. Yes. Taxable Inheritance (spouse exempt)

*The above applies to gross ARF funds i.e. set up after April 2000.

 

Pension Fund Taxation

  • Pension Fund Levy of 0.6% of the market value of the fund at 30th June 2013 to be paid on all pension schemes (excluding AMRFs/ARFs) by 25th September 2013.
  • Imputed distribution on ARF ( if age 61 or over) is 5% of the value of the fund as at 30th November, rising to 6% in respect of ARFs with asset values in excess of €2 million as at 30th November (or, where an individual owns more than one ARF, where the aggregate value of the assets in those ARFs exceeds €2 million).
  • Imputed Distribution on a similar basis applies on all vested PRSAs.

 

Revenue Uplifted Scales for Occupational Pension Schemes

Year of service completed by NRA “Uplifted Pension”* Year of service completed by NRA “Uplifted Lump sum”*
1 1/10th x 2/3rds 1-8 3/80ths for each year of service
2 2/10th x 2/3rds 9 30/80ths
3 3/10th x 2/3rds 10 36/80ths
4 4/10th x 2/3rds 11 42/80ths
5 5/10th x 2/3rds 12 48/80ths
6 6/10th x 2/3rds 13 54/80ths
7 7/10th x 2/3rds 14 63/80ths
8 8/10th x 2/3rds 15 72/80ths
9 9/10th x 2/3rds 16 81/80ths
10 2/3rds 17 90/80ths
18 99/80ths
19 108/80ths
* As a fraction of final remuneration 20 120/80ths

 

Tax relief on Personal Contributions

Age attained In tax year

Personal Pensions/PRSA’s

(Employee & AVC)

Under 30

15% of NRE (Earnings)

30 – 39

20% of NRE (Earnings)

40 – 49

25% of NRE (Earnings)

50 – 54

30% of NRE (Earnings)*

55 – 59

35% of NRE (Earnings)

60 and over

40% of NRE (Earnings)

Maximum net relevant earnings on which relief allowed in 2013 is €115,000.This limit will also apply to contributions paid in 2013 which are to be backdated to the 2012 tax year. Employee contributions to pension arrangements are subject to employee PRSI and the Universal Social Charge.*30% limit applies to certain professional sportspeople, under age 50, in relation to their sports income.

 

Taxation of Retirement Lump Sums

Lump Sum

Income Tax

First €200,000

Exempt

Next €375,000

Standard rate income tax

Balance

Marginal rate income tax + USC

Tax-free retirement lump sums taken on or after 7 December 2005 will count towards “using up” the new tax free amount so that if an individual has already taken tax free retirement lump sums of €200,000 or more since 7 December 2005, any further retirement lump sums paid to the individual on or after 1/1/2011 will be liable to income tax at either standard rate, or at marginal rate where the aggregate retirement lump sums exceed €575,000.

 

AVC’s – Pre-retirement access to funded Additional Voluntary Contributions

Individuals will be allowed a once-off option to withdraw up to 30% of the value of funded Additional Voluntary Contributions made to supplement retirement benefits.

Withdrawals will be liable to tax at an individual’s marginal rate.

The option to withdraw will be available for 3 years from the passing of Finance Bill 2013.

 

 

 

Disclaimer: Eamon Porter trading as Aspire Wealth Management accepts no responsibility for any of the information contained herein. The information listed above was correct at the time of preparatio, and is based  on the Budget 2017 Statement – January 2018.

 

 

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