Post 50 options

[Beltra]

Hi guys.When you reach 50 on a previous employer plan there is an option of a maximum cash lump sum and full withdrawal of the balance subject to income tax.In the small print it says proof of guaranteed income for life of 12700 per annum in order to receive the taxed withdrawal....what exactly does this mean please?

 

[LDFerguson]

You can take the tax-free lump sum no matter what.

In order to take the balance you must have guaranteed lifetime income of at least €12,700 per year from another source. In practice, that means another pension in payment of at least €12,700 per year.

If you don't have this, you can reinvest the balance in an Approved Minimum Retirement Fund (AMRF) and draw an income of 4% per year from it or use the balance to buy an annuity - a fixed income or life.

Regards,

Liam
www.ferga.com

 

[Beltra]

You can take the tax-free lump sum no matter what.

In order to take the balance you must have guaranteed lifetime income of at least €12,700 per year from another source. In practice, that means another pension in payment of at least €12,700 per year.

If you don't have this, you can reinvest the balance in an Approved Minimum Retirement Fund (AMRF) and draw an income of 4% per year from it or use the balance to buy an annuity - a fixed income or life.

Regards,

Liam
www.ferga.com

Thanks Liam would the sum of a UK and Irish state pension suffice for the 12700?

 

[Gordon Gekko]

It would indeed

 

[Conan]

But you must be in receipt of a guaranteed pension, which you won’t at age 50, if you are thinking of State Pensions.