# Tax-free lump sum from pension - waive or retain for redunancy calc.



## shellie_13 (22 May 2009)

I am a single 36 year old female and have been made redundant after 10 years in employment. My ex-gratia payment is good as I get 6 weeks for each year plus statutory. I am working through the tax computation at the moment with my employer - and the best option is the SCSB calculation. The only decision to be made now is whether to waive or retain a tax free lump sum at retirement for the purposes of the SCSB calc.
The Net Present Value of the lump sum is 17,000.
The net cash difference in my redundancy payment now between choosing waive or retain is about 10,000.

I would welcome opinions on best route ?


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## Squonk (22 May 2009)

I would say you would want to keep the lump sum for your actual retirement when you may need the money more.


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## Don_08 (22 May 2009)

1.  You still have nearly 30 years ( assuming a 65 retirment age) to build up another tax free lump sum on retirement.  Its just the right to take a tax free lump sum from the pension relating to this employment you are waiving.

2.  If rumours are true, then this tax free lump sum might not even be permitted by the time you come to retirement anyway.  We'll see what happens at dec budget.

3.  By waiving the right ( and taking €10k now) - you still get the same value of pension  - all you are doing is waiving the option to take it in cash form.   If you have AVCs you can still take them as an ARF, and in cash form, taxed. 

If I were in your shoes I would waive it.


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