25% tax free pension withdrawal at age 50

[ksmith169]

Hello All,

I read with some interest here -> https://nationalpensionhelpline.ie/pension-calculators/tax-free-pension-lump-sum/

In summary you can withdraw 25% of your pension tax free when aged 50 or above. From reading the site it says you can keep working after this withdrawal. I have the following questions. The maximum you can withdraw tax free is €200,000 Obviously you are doing well if you can do this. You would have a pension pot of €800,000.

• Just to confirm if you withdraw 25% now and continue work can you keep contributing to that same pension? Or must you start a new pension?
• If yes to question above can you the withdraw another 25% tax free at a later date from the same pension?

As an example lets say you have €100,000 in your pension now. You are ages 50. You with draw €25,000 today. This means there is €75,000 left in the pension. You continue working and contributing to the pension. Lets say you contribute enough in 4 years to get the pension back to €120,000. Can you now withdraw another 25%? The 25% would be €30,000 this time around. You are aged 54 now. So total withdrawn is €25,000 + €30,000 = €55,000 which is still under €200,000.

Or can you only make a single 25% withdrawal tax free?

Any information much appreciated,

Kevin.

 

[RedOnion]

Just to confirm if you withdraw 25% now and continue work can you keep contributing to that same pension? Or must you start a new pension?

No. You must have left the employment that the pension relates to in order to draw down the 25% at 50.

I read with some interest here -> https://nationalpensionhelpline.ie/pension-calculators/tax-free-pension-lump-sum/

There's some misleading/ outdated information on that website.

 

[ksmith169]

Thanks for information RedOnion.

Good to know. Pity the official web-site is misleading/outdated.

 

[ClubMan]

What do you mean by "official"?
I'm not sure that that site is "official" as in a Government sponsored site?
It looks like a site designed to route punters to brokers to me:

About - National Pension Helpline

The National Pension Helpline was established as a free & reliable source of information for pensions in Ireland. We all know that we need to save for our retirement & putting money into your pension is the best way to do that.

nationalpensionhelpline.ie

NationalPensionHelpline.ie is an information-only website and does not provide direct financial advice. By submitting your information through the platform, your information is sent directly to our pension advisor partners who are regulated by the Central Bank of Ireland. NationalPensionHelpline.ie has a registered office at National Pension Helpline, 151 Thomas Street, Dublin 8, D08 PY5E.

Privacy Policy - National Pension Helpline

We are very delighted that you have shown interest in our enterprise. Data protection is of a particularly high priority for the management of the National Pension Helpline, hereby referred to as “the company”. The use of the Internet pages of the company is possible without any indication of...

nationalpensionhelpline.ie

The storage of all data submitted during the enquiry / registration stage are passed to one of our central-bank regulated Partners listed below:

– Willis Towers Watson
– First Choice Financial Services
– OMA Financial Services Ltd.
– Actual Insurances
– Ethico Limited
– Perk Life
– Pinnacle Financial
– Sparks Wealth Ltd
– Kirwan Insurance Services Ltd
– Advice First Financial Services Ltd
– True Financial Ltd
– Innovu Insurances
– Walfrid Private

It has Dublin Mint Office vibes to me - masquerading as some sort of "official" entity.

 

[RedOnion]

Pity the official web-site

There's nothing 'official' about it. It's run by a Web search / advertising company, creating leads for brokers.

Edit: 'BeQuick Media' is the company that runs it.

 

[Luternau]

Perhaps the Central Bank or Pensions Regulator should step in here and shut down a site that in its name seeks to elevate itself to some sort of official or state source of information. The name is clearly selected to give a more official kudos where its just a marketing company with no knowledge of pensiona at all.

Edit:crossed with @RedOnion

 

[ClubMan]

Perhaps the Central Bank or Pensions Regulator should step in here

Perhaps somebody with concerns about it might report it to the regulators?

 

[ksmith169]

Yikes - I was naive there. I did not think it could be anything but a legit site.

Thanks for the information again all.

 

[Luternau]

Perhaps somebody with concerns about it might report it to the regulators?

Indeed... I was never aware of it to do so until the OP. Equally, one would think those who regulate financial products and offerings would also be aware of such sítes, the mis information or out dated information and take necessary regulatory steps that they are empowered with.

 

[ClubMan]

Yikes - I was naive there. I did not think it could be anything but a legit site.

Always start with known official links:

Welcome to the Pensions Authority - pensionsauthority

The Pensions Authority regulates occupational pension schemes, trust retirement annuity contracts (RACs) and personal retirement savings accounts (PRSAs). Our website provides you with access to a comprehensive range of information and guidance material to help you understand pensions. The...

www.pensionsauthority.ie

Pensions

www.citizensinformation.ie

Pensions and retirement

www.revenue.ie

 

[Luternau]

Yikes - I was naive there. I did not think it could be anything but a legit site.

Thanks for the information again all.

Always go the end of these types of sites and read the disclaimers or About Us. Then go back up and read away with the knowledge that it's official or in this case a marketing company with no expertese in Pensions.

If it's an official site it will also be marked Government of Ireland or Govt Dept name etc.

 

[Dave Vanian]

It's been pointed out here on Askaboutmoney that the website you mention is littered with inaccuracies and wrong or incomplete information.

The rules regarding early retirement are different depending on what type of pension plan you have. So if you can post what type of pension plan you have, you'll get a reply that's relevant to yours. (PRSA? Occupational Pension Scheme? Personal Pension? Buy Out Bond?)

 

[ksmith169]

Always start with known official links:

Welcome to the Pensions Authority - pensionsauthority

The Pensions Authority regulates occupational pension schemes, trust retirement annuity contracts (RACs) and personal retirement savings accounts (PRSAs). Our website provides you with access to a comprehensive range of information and guidance material to help you understand pensions. The...

www.pensionsauthority.ie

Pensions

www.citizensinformation.ie

Pensions and retirement

www.revenue.ie

Thanks ClubMan.

Lump sums

Virtually all pension arrangements allow you to take a tax-free lump sum within certain limits at retirement...

www.pensionsauthority.ie

Tax relief on pensions

You can get income tax relief on your pension contributions. You can also get tax relief on a lump sum pension payment when you retire.

www.citizensinformation.ie

https://www.revenue.ie/en/tax-professionals/tdm/pensions/chapter-27.pdf

Above are direction links to anyone else who is interested. I am going to study them and then I will summarise what I find that is relevant to my original question.

 

[ksmith169]

It's been pointed out here on Askaboutmoney that the website you mention is littered with inaccuracies and wrong or incomplete information.

The rules regarding early retirement are different depending on what type of pension plan you have. So if you can post what type of pension plan you have, you'll get a reply that's relevant to yours. (PRSA? Occupational Pension Scheme? Personal Pension? Buy Out Bond?)

Thanks Dave.

Just double checked. I have a personal pension.

 

[Fortune]

Thanks for information RedOnion.

Good to know. Pity the official web-site is misleading/outdated.

It's not an official website. It's a site to funnel business to a broker.

 

[Fortune]

Thanks Dave.

Just double checked. I have a personal pension.

In that case, 60 is the earliest age you can take a lump sum from that pension. You could continue to work, and contribute to a new personal pension (up to the limits for that employment) and take another 25% lump sum at a later date.

 

[ksmith169]

In that case, 60 is the earliest age you can take a lump sum from that pension. You could continue to work, and contribute to a new personal pension (up to the limits for that employment) and take another 25% lump sum at a later date.

OK interesting. Does the the remaining 75% of first pension has to go into an ARF? So the new personal pension is a completely new pension.

 

[Luternau]

It's not an official website. It's a site to funnel business to a broker.

I looked at the video.

https://vimeo.com/738244987
Cringe and what about the use of the harp on the video still logo. This is not permitted.(The Dublin Mint Company had a cease and desist on the use of the harp on their coins)

Wondering if Dan Malone is a registered financial advisor in Ireland or just a content creator on financial topics.

 

[ClubMan]

I looked at the video.

https://vimeo.com/738244987

Link doesn't seem to work.

Wondering if Dan Malone is a registered financial advisor in Ireland or just a content creator on financial topics.

https://www.linkedin.com/in/dan-malone-374733b1?originalSubdomain=ie

Dan Malone​

3rdPremium memberFounder & Content Creator at @Malone Financial (YouTube, Instagram, TikTok) | Ex-PwC | ACA, CTA, QFAChartered Accountants Ireland Malone FinancialGreater Dublin 500+ connections

 

[Dave Vanian]

Does the the remaining 75% of first pension has to go into an ARF?

No. Alternatives - You could take it all out as a taxable lump sum - subject to tax as if it was earned income. Or you could buy an annuity - fixed income for life - with it.