Pussyhands wrote: » So who is eligible for the 200k lump sum?
RoboKlopp wrote: » Massive tax breaks for pension. It's a no brainer. There's also a tax free lump sum of up to 200k at pension age that can be availed off.
McGaggs wrote: » It's a limit on the amount you can get tax free. You can have a lump sum of either 25% it 1.5times depending on your circumstances. The first 200k of that lump sum is tax free, the next 300k is taxed at 20% and anything over 500k is taxed under PAYE.
Drumpot wrote: » I presume you are referring to above post ? The maximum tax free cash available from all Pension funds is potentially €200k. You can actually potentially drawdown a further €300,000 @ 20% tax but that will not be relevant for a lot of people. You have to have built up at least €200k in a Pension somewhere (DB and/or DC) to be able to draw this down. 1) Pension fund of €200,000 @ 65. Retirement age of scheme is 65. 20+ years service, no other pensions. Final salary = €133,000. Tax free cash option of 1.5% x salary = €199,500*The 1.5 x salary calculation may be proportionately lower if you are retiring early or do not have full 20 years service when claiming benefits 2) Pension fund(s) of €800,000 @ 65. You can drawdown 25% of the value of this fund which equals €200,000.
Pussyhands wrote: » So anyone can take the 200k lump sum tax free irrespective of salary? If I have 200k in my pension pot I can take it all tax free? Or is it limited to 25%? (50k) If it's limited to 25% it's not as good as it sounds as most if your money is still tied away and you may never see it.
....... wrote: » Whats a good sum to have in your pension pot come retirement?
Pussyhands wrote: » What you have done looks far less attractive than saying you can get 200k tax free when you retire with your pension. 1. You need to have a high salary and work a long time with the one company to avail of the best method. What I think you're saying is, if your pension pot is 200k, if you earn 133k and have served the required number of years you can take all your pension pot tax free. 2. If I don't earn a high salary, to get the 200k I'd need to have 800k in my pot, most of the money would be tied away and likely never seen. Let's take an example and see if this is possible. I pay 1200 into pension a year. Employer matches. That's 96k at the end of 40 years. Say the pension stays exact same, excluding fees etc. If my final salary is 60k, can I take 90k of the 96k tax free?
Zamboni wrote: » There are many ways of trying to figure this out... It depends on how much money you are comfortable living on when you retire. I like the 4% rule also known as F*%k you money :pac: TLDR: Figure out how much you need to live on for a year and multiply by 25. Boom - get saving. You'd obviously caveat that with endless assumptions about interest rates, and whether you have owned accommodation at time of retirement but it's a simple effective target number to start at.
McGaggs wrote: » €2.15 million would be the optimum sum, assuming you have sufficient earnings to have it within limits.
Zamboni wrote: » You'd obviously caveat that with endless assumptions about interest rates, and whether you have owned accommodation at time of retirement but it's a simple effective target number to start at.
Drumpot wrote: » Never heard of that Stoic Paddy guy, very funny way of educating people . . :pac:
NSAman wrote: » There are other ways and means besides a pension pot. Personally, I do not have a pension. Having seen the raids on pensions and not having liquid cash to pay into one, I prefer a different method to tie me in my old age. Property and investments in business. Even at this stage in life (and I have NO desire to ever retire fully) I can happily see where money will come from into my old age. When I eventually do kick the bucket, not only will I have lived a full and enjoyable and safe life... there will be a big squabble over what is being left. I don't care about myself really, I love what I do, I have earned and saved enough to retire if I so wish at any stage, but I choose not to.
....... wrote: » I genuinely dont know if you are being serious or not here. But I suspect not. Surely only a tiny percentage of the population would have even 1 million in their pension pot come retirement? Considering so many dont even have a private pension at all. I saw an article somewhere that suggested 1 mill was enough (combined with the state pension) for a couple to retire at 60 on, so 500k should be enough for 1 person?
Miriam Savory Horn wrote: » Ah another 'Boards millionare' who doesn't need to work and has endless money.
....... wrote: » Surely only a tiny percentage of the population would have even 1 million in their pension pot come retirement? Considering so many dont even have a private pension at all.
bilbot79 wrote: » I agree. Something like 2.5mil is luxury. I think 1.5 mil is optimum especially knowing the state pension eventually kicks in too. This is the best calculator I findhttps://www.newireland.ie/pension-calculator/
donkey balls wrote: » It was private sector pensions that Noonan stole from, It finished a year or two ago from memory
SureYWouldntYa wrote: » There’s the tax incentives too I dont know the exact rates, but putting €1000 in your pension pot might only cost €600 or so, again not sure of the exact rates but there are incentives Also the earlier you start the better. Assuming a nominal rate of return and contributions across all years, your pension at pension age will be worth more if you invest from 25-35 and stop than if you start at 35 and go to 65, such is the power of compounding
Dakota Dan wrote: » Tax incentives when paying in and taxed when withdrawing the pension.
Jim2007 wrote: » No it does not. You are failing to take human nature into account. Given access to pension savings, people will always find a very good logical reason to spend it. If you look at countries that allow access such as the US 401K, IRA etc, you find that the people's total net worth on reaching retirement is very low. Here in Switzerland pension funds are very tightly controlled both in terms of contribution and management. So much so that if a fund manager fails to return a predefined minimum return as set by the government, they are required to pay into the fund to bring it up to the expected level. As a result it is not unusual to find say an electrician retiring at 58 with 600K - 700K in their fund.... and the big shock provably for an Irish person is that the consider putting more the 7% of it into property as being a very foolish thing to do.
