Accessing Pension in 50's

mactheknife19

Trying to understand what potential withdrawal I can make from my pension when I leave my employer in the next two years and exit the occupational pensions. At exit stage I will have been with my one and only employer for 24 years (a MNC), and I likely be able to get a redundancy package of 5 weeks per year of service. When I exit the pension pot will not be huge, only about 250k. I will be 50/51 and potentially I be taking a few years off as we go through some of the exams years in school, and possibly I may not even return to work as my partner has a very good job and a significant pension pot so we can afford to live well on her salary and pension. So the stay at home decision is more of a lifestyle decision.

So what I'm trying to understand is how can I access my pension pot when I possibly stop working in 2-3 years. Whatever I take out will be used for paying of the mortgage and renovations not for day to day expense.

So how much can I take, and is there any financial negatives on doing it (any tax implications on taking it at 50 as opposed to 65). As I've mentioned their is no concern on having no person pension at a later stage because of my wife pot.

Thanks

Henry Ford III

There are too many variables so I'd suggest asking your pension provider or advisor.

The J Stands for Jay

You'd need to give a fair amount of info to get proper advice on that. Maybe better going to a pro than posting it on the internet.

Happyhouse22

https://www.boards.ie/discussion/2058247490/accessing-pension-in-50s

Not an expert but will try to answer based on what I know.

No penalties for taking the pension at 50 rather than later.

Only certain types of pension can be accessed at 50 - others are accessible at 60 so you will need to figure that out.

You can take 25% tax free as a lump sum - 62,500

The remainder of the money can go into an ARF . A minimum of 4% must be taken from an ARF from age 60 - before that no withdrawals are required.

4% of 187,500 would be a pension sum of 7500 per year

Shedite27

I'd echo the "talk to the broker" approach. Most Pensions only allow access in 60's, although there are exceptions.

Small but useful tip is to keep making voluntary PRSI payments so you'll be eligible for the full state contrib pension by the time you turn 67 (or whatever age the dunderheads in the Dail have decided pensions should be paid from by the time you reach eligibiity!).

AndrewJRenko

Talk to your pension folks first. They’re the only ones who can confirm that you can retire at 50. It could be your internal HR folks, or maybe they outsource pension management to Mercer or other outside provider.

They should be giving you an annual statement of benefits. If you haven’t been getting this, chase it up.

Don't think there are any major tax implications. Watch your lifetime tax free lump sum maximum - €200k I think. If you use up all of this on this pension, you won't be able to use it for any other pension.

The main impact is the loss of maybe 15 years tax-free growth within your pension fund. If things continue on the same historical perspective, this could end up doubling your money if it were to stay in the fund.

I don't think a broker would be much help. A broker sells products, so unless you're buying something, they're not going to be much help.

Henry Ford III

https://www.boards.ie/discussion/comment/119165924#Comment_119165924

A good broker can give professional and quality advice. Worth remembering.