I am due to get a small pension next year. €20k per annum or €15k per annum plus lump sum of €50k. (figures rounded).
I don't need the lump sum but I am wondering if I am being foolish in not taking the tax free lump sum.
I expect not to be paying tax on my monthly pension if I opt to take the full €20k. If the state pension is added to my work pension of €20k, will this push me in to a tax bracket? My total annual income with work pension and state pension will be about €32k. (I have money in An Post savings Bonds/Certs to live off).
It will take me approximately 11 years to earn the lump sum back if I opt for the annual pension rather than the lump sum. After that I am on free money so to speak.
I could always take a smaller lump sum and increased annual pension but down the road tax rules might change.
Is the lump sum in the hand now the better decision?
I don't need the lump sum but I am wondering if I am being foolish in not taking the tax free lump sum.
I expect not to be paying tax on my monthly pension if I opt to take the full €20k. If the state pension is added to my work pension of €20k, will this push me in to a tax bracket? My total annual income with work pension and state pension will be about €32k. (I have money in An Post savings Bonds/Certs to live off).
It will take me approximately 11 years to earn the lump sum back if I opt for the annual pension rather than the lump sum. After that I am on free money so to speak.
I could always take a smaller lump sum and increased annual pension but down the road tax rules might change.
Is the lump sum in the hand now the better decision?