yellowmoose
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can anyone explain the benefit of growing over the €2M versus moving to an ARF once the lump sum is maxed if you are paying tax at the top rate?
can anyone explain the benefit of growing over the €2M versus moving to an ARF once the lump sum is maxed if you are paying tax at the top rate?
maybe that could be updated for the newly-created area of one's pension fund which is above the 500k tax-efficient % threshold but below the CET thresholdKey Post - Should you contribute to a pension fund if you are in danger of breaching the €2m limit?
What is the Standard Fund Threshold? In summary, it's the €2m cap placed on the public or private sector pension benefits that an individual can accumulate in Ireland over his or her lifetime. If the individual breaches the SFT, at the point the offending pension benefits are retired, he or she...www.askaboutmoney.com
Can you explain what you mean by "lump sum is maxed"?can anyone explain the benefit of growing over the €2M versus moving to an ARF once the lump sum is maxed if you are paying tax at the top rate?
Well, the OP currently has pension pots with a value of €2.3m and I’m suggesting going to cash.Can you clarify what you mean by "sufficiently" here?
I'm probably missing something here?
I don’t think it makes sense to make further contributions to a pension once it reaches €2m because of the new €500k ceiling.maybe that could be updated for the newly-created area of one's pension fund which is above the 500k tax-efficient % threshold but below the CET threshold
i mean when the fund reaches 2.15m and you can withdraw 200k tax free and 300k at 20%. anything above 2.15 (even when the sft is increased) won't change that 500k limitCan you explain what you mean by "lump sum is maxed"?
Drawdowns are taxed at the marginal rate of income tax, plus USC, plus PRSI (until you are awarded the State pension or turn 70), whereas contributions are only relieved from income tax
Well, I don’t think it makes sense to maintain an aggressive asset allocation once a pension pot reaches €2m, given the taxation of drawdowns.I would think at this level the fund will be increasing through growth rather than new contributions
Well, I don’t think it makes sense to maintain an aggressive asset allocation once a pension pot reaches €2m, given the taxation of drawdowns.
In general, yes, that would be the right approach. But the OP is over the current SFT.…would it be better to convert to ARF, banking the lump sum, and let it grow there?
I think that’s definitely the case.my suspicion is that the new rules are designed to satisfy the guards/consultants problem of the overall SFT limit without making it any practical use to defined contribution fund holders