Hi all,
I have a small IBM DC pension fund accumulated while I worked there in the late 90's, early 2000's. It's worth 66k right now. It was worth up to 80k last year but the markets went where they went for the time being. I do not need this money or at least I do not believe I will ever need it. I will have a 39/40ths COAP from Ireland and a ca. €500 state pension from Germany but most of my income in retirement will continue to come from rental properties as it does now.
I am 45 this year and I am aiming towards just moving this entire pension fund into an equities based ARF. I will NOT be taking a tax free lump sum because I am tax resident in Germany and this payment would be taxable income like any other. The ARF distributions on the other hand are only taxable in Ireland (Germany being one of the few countries where the Irish DTA specifically covers ARFs and gives the taxation rights solely to Ireland), which suits my situation.
So, I am hoping to do the following:
Buy an ARF at age 50 (in 5 years). Why? Because I want to get the 52 PRSI credits towards the COAP from the distributions. At present I buy these credits voluntarily. Is there a minimum amount I need to withdraw from the ARF to be entitled to PRSI credits? I do not want to withdraw large amounts from the ARF just to get "free" PRSI credits. They are only costing €500 a year so needlessly depleting my ARF to buy them is not part of the plan.
Ideally I would like to withdraw say just 1% from the ARF each year from age 50 until I reach 61 when I believe I will face essentially compulsory withdrawals of 4% and 5% from age 70. That's ok as it gives the pension fund->ARF another few years to grow (hopefully). Is it possible to withdraw such a small amount and still get the PRSI credits? Is there a minimum withdrawal amount before it is possible to receive 52 credits per year?
Even if the above is a non-runner and I will be leaving the ARF fully invested until compulsory withdrawals at 61, am I correct in assuming that the current "Long Term Growth Fund" is not the best match for someone like me that wants to invest the pot in an equities based ARF anyway? There are only about 50% equities in that fund and I am thinking it makes more sense to move it to a purely equities based fund, like the "Global Developed Market Equity Fund" which has fees of 0.08% and is presumably essentially an ETF type passive investment similar to an MSCI World Index. This is the sort of ARF I would end up investing the pension fund in anyway so wouldn't it make sense to move to that sort of risk profile already? (I am comfortable with the associated risk of investing the entire fund in a well diversified equity based fund)
Here's the current fund I am in: https://www.merceroneview.ie/Content/DCPension/ICs/1363543IBMMGILongTermGrowthFund.pdf
I have a small IBM DC pension fund accumulated while I worked there in the late 90's, early 2000's. It's worth 66k right now. It was worth up to 80k last year but the markets went where they went for the time being. I do not need this money or at least I do not believe I will ever need it. I will have a 39/40ths COAP from Ireland and a ca. €500 state pension from Germany but most of my income in retirement will continue to come from rental properties as it does now.
I am 45 this year and I am aiming towards just moving this entire pension fund into an equities based ARF. I will NOT be taking a tax free lump sum because I am tax resident in Germany and this payment would be taxable income like any other. The ARF distributions on the other hand are only taxable in Ireland (Germany being one of the few countries where the Irish DTA specifically covers ARFs and gives the taxation rights solely to Ireland), which suits my situation.
So, I am hoping to do the following:
Buy an ARF at age 50 (in 5 years). Why? Because I want to get the 52 PRSI credits towards the COAP from the distributions. At present I buy these credits voluntarily. Is there a minimum amount I need to withdraw from the ARF to be entitled to PRSI credits? I do not want to withdraw large amounts from the ARF just to get "free" PRSI credits. They are only costing €500 a year so needlessly depleting my ARF to buy them is not part of the plan.
Ideally I would like to withdraw say just 1% from the ARF each year from age 50 until I reach 61 when I believe I will face essentially compulsory withdrawals of 4% and 5% from age 70. That's ok as it gives the pension fund->ARF another few years to grow (hopefully). Is it possible to withdraw such a small amount and still get the PRSI credits? Is there a minimum withdrawal amount before it is possible to receive 52 credits per year?
Even if the above is a non-runner and I will be leaving the ARF fully invested until compulsory withdrawals at 61, am I correct in assuming that the current "Long Term Growth Fund" is not the best match for someone like me that wants to invest the pot in an equities based ARF anyway? There are only about 50% equities in that fund and I am thinking it makes more sense to move it to a purely equities based fund, like the "Global Developed Market Equity Fund" which has fees of 0.08% and is presumably essentially an ETF type passive investment similar to an MSCI World Index. This is the sort of ARF I would end up investing the pension fund in anyway so wouldn't it make sense to move to that sort of risk profile already? (I am comfortable with the associated risk of investing the entire fund in a well diversified equity based fund)
Here's the current fund I am in: https://www.merceroneview.ie/Content/DCPension/ICs/1363543IBMMGILongTermGrowthFund.pdf