retirement bond

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mosii

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Hi,I am over 50 and I am been giving the option due to changing jobs of transferring my pension pot of 31000 to another personal retirement bond.I could take 11000 now and an annuity of 456 annualy.My question is would I get a better deal from a personal retirement bond with this other company,transferring my 31000 to them for a few months and then take it out to retire,a bit confusing I Know,thanks
 
If you are looking for enhanced allocations, insurance companies have early exit penalties to protect themselves from people investing with them, getting the bonus allocation and then maturing/ transferring the policy. This is obviously a real cost to the insurer so they aren't going to let it happen.

If you are still working, I would ask why cash it in now at all? Why not let it grow more. If you are going to annuity route, it is likely you can get a better rate by the mere fact that you are older.

Steven
www.bluewaterfp.ie
 
Thanks for reply, according to my proposed new prb I would incur a 3% fine in the first year, this would be small in comparison to 20000 I would be down if I accepted the 11000.I am new to this so sorry for my lack of knowledge.Thanks Steven
 
Thanks,i want to be deducted 3 % of 31000 in a prb ,and take this amount instead of taking 11000 and an annuity of 456 or so under my current offer, if this is possible,thanks again
 
The reason for the early exit penalties is the life company are paying the broker's fees. If you pay the brokers fees, those early exit penalties do not apply.

If you are looking to mature the policy, you have two choices:

1. Tax free lump sum based on your salary and years service and purchase an annuity with the remainder - this seems to be the €11,000 plus €456 annuity
2. Tax free lump sum of 25% fund value and the remainder in an AMRF - you can take 4% of the the value each year - €7,750. 4% works out at €930 a year but this will vary based on fund performance.

There are lots of different contract structures in place with various options, so it is likely you can get what you need.

Steven
www.bluewaterfp.ie
 
thanks for your time and effort, is there a minimum amount I must have to open a AMRF.I am kind of thinking is a bird in the hand worth 2 in the bush,
thanks again.
 
No, no minimum for the AMRF. You get 25% tax free from your pension and the remainder goes into the AMRF. There is a maximum of €63,500. Anything over that amount goes into an ARF, which gives you total freedom on how much you can take out instead of the 4% limit under the AMRF.

If you don't want to mature your pension now, you can just leave it in a PRB and mature it at some other time if you wish.

Steven
www.bluewaterfp.ie
 
Sorry 1 more question.If I took 25% tax free this year could I also take 4% of remaining fund for this year.and 4% again in january.Thanks
 
If I was to take 4% annually am I charged early encashment fees. Also would early encashment fees apply to taking 25% lump sum thanks for any help.
 
Anybody with any further advice on the above, also how much would broker fees be approx. Thanks again
 
Hi Mosii

I was at a wedding on Thursday so wasn't online :)

Yes, you can take the 25% tax free and 4% this year. There are no early encashment fees for taking out the 4%. There shouldn't be early encashment fees for cashing in a buy out bond early but some companies only have contract structures with early exit penalties, so be careful.


Steven
www.bluewaterfp.ie
 
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