Have money sitting in a PRSA from a previous employment which i haven't contributed to since I retired and I read somewhere that I can just cash it in. Is that correct or is it necessary to buy an annuity with it. Have been on various sites including the prnsions board and have read somewhere that it can be cashed in if not contributed to for 2 years. Is that correct please. Would appreciate some advice.
PRSA- cash in or Annuity required
- Thread starter Maretta
- Start date
If you have retired from your most recent employment then you can "retire" the PRSA. That means that you can take 25% as a lump sum (probably tax free). The balance of 75% can either be used to buy an annuity or invested into an Approved Retirement Fund from which you can draw an income ( or draw all of it down - subject to tax).
Hi Maretta
In order to cash in the PRSA as you describe(2 years since last contribution), the value of the PRSA would need to be less than 650 euro.
However you may be able to draw down the PRSA under the trivial pension rule, that is; if the value of all your combined pension funds after taking your tax free lump sums is less than €20,000, you can take this subject to tax, USC and PRSI.
If the value of your PRSA is less than circa €7000 and you have no other pension arrangements you can draw down the value subject to a standard tax rate of 10% (this is not income tax) there is no PRSI or USC charged either!
Or if you have guaranteed pension income of over €12,700 p.a. you can draw down your PRSA regardless of what value it is.
In order to cash in the PRSA as you describe(2 years since last contribution), the value of the PRSA would need to be less than 650 euro.
However you may be able to draw down the PRSA under the trivial pension rule, that is; if the value of all your combined pension funds after taking your tax free lump sums is less than €20,000, you can take this subject to tax, USC and PRSI.
If the value of your PRSA is less than circa €7000 and you have no other pension arrangements you can draw down the value subject to a standard tax rate of 10% (this is not income tax) there is no PRSI or USC charged either!
Or if you have guaranteed pension income of over €12,700 p.a. you can draw down your PRSA regardless of what value it is.