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Lump withdraw from Pension

  • 03-09-2022 6:23am
    #1
    brokenangel
    Registered Users, Registered Users 2 Posts: 4,242 ✭✭✭


    Now I have no idea if this is possible, so pension statement landed in. It is a private one and a decent sum in it. Now I seen some ad's online which I read but thought maybe a scam but anyway

    Main question is, because my pension is private can I withdraw a lump sum now, to pay off mortgage.

    Then I would take the normal mortgage payment and pump back into the mortgage over the next 10-15 years while I remain in work? (I want early retirement)

    Or is that allowed?


    The other thing I seen was convert the mortgage to a "interest only" mortgage and then pay a lump sum off when you turn 60/retire. But haven't seen many interest only offers in Ireland. Was on UK site


    Thanks



Comments

  • #2
    FastFullBack
    Registered Users, Registered Users 2 Posts: 1,466 ✭✭✭FastFullBack


    You'll get way more educated answers than me but here is my take.


    I think if that pension is from your current employer you can't draw it down until your retired from them.


    I'm also pretty sure you can only draw down your pension once and when you do you can take a 25% lump, tax free (upto €200K I believe). But then once it's drawn down I think you'll have to start taking a monthly amount out of it as well.


    In your situation I would nearly pay the minimum on the mortgage, presumably paying around 2-3% interest, max out the pension and aim to earn 5-6% growth on your pension. Then clear the mortgage when you do finally draw it down with the lump sum.



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