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Early Retirement pension lump sum Query

  • 02-12-2021 4:04pm
    Posts: 0

    When I turn 50 (😫) I'll have access to a pension that I had from a previous employment. If I take 25% tax free lump sum of this, can I still take a tax free lump sum from another pension when I "properly" retire up to €200k? I had thought so, until someone said 'You can only retire once for the purposes of lump sum access'.

    This pension pot is just less than €40k. Would I be able to get access to the other 75% (taxable at marginal rate) at 50 also? I don't have another pension (I do have other investments, and will be funding approx 10% of my salary in January).



  • Registered Users Posts: 659 ✭✭✭KevinK

    My understanding is that the lump sum is a lifetime amount. That is if you 10,000 now yiu can still have 190,000 tax free in the future.

    If yiu take 25% of the 40,000 then the other 30,000 can go into ARF fro which yiu will need to withdraw at least 4% each year.

    There might also be an option to withdraw more than 25% tax free, it is also possible to withdraw 1.5 times your final salary with the remainder going into an annuity. But nit sure how that works when you haven’t worked there for a while - but might be worth looking into.

  • Registered Users Posts: 476 ✭✭Cameraman

    My understanding is this :

    The current tax-free total is €200k for lump sums across all pension schemes. This could change in the future.

    You can only "retire" once for a given pension scheme. However, each scheme is treated separately (subject to the overall limits) so you can "retire" different schemes at different dates.

  • Posts: 0 [Deleted User]

    Thanks Guys, Appreciate that. Only seeing responses now.

  • Registered Users Posts: 9,329 ✭✭✭Shedite27

    This is my understanding too. I've been advised previously to keep old pensions separate for this very reason (to take bits at different times).

  • Registered Users Posts: 4,516 ✭✭✭Treppen

    How do you mean keep old pensions separate? Do you mean not transferring/compiling old pensions into one new fund after you move jobs…?

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  • Registered Users Posts: 9,329 ✭✭✭Shedite27

    Yeah, brokers get paid commission for moving money so a lot will encourage you to combine funds into one pension.