PRSA Query

thespecialon

Registered User
Messages
211
Hi All,

Considering contributing a small amount to a PRSA..
I am public sector earning 90K per year, I will be 3 years short of full pension when I retire @65,joined in 2007..
Am I correct in saying the scope I have would be 3/80(*3 for the 3 years missed) so 9/80 * 90K = 10,125€ to bring my lump sum up to full service value...
Anything over this (10,125€) would then be taxed at 40% as my annual salary would be 37/80 * 90 K = 41,625€ .
Thanks for any advice
 
Maximising your retirement lump sum is the first priority. So investing circa €10,000 into an AVC makes sense, with 40% tax relief. Funding for extra pension makes no sense if you will be taxed at top rate in retirement.
Do also check whether the Salary figure used for your retirement lump sum is the max. Do you have any non-pensionable income such as bonuses, overtime allowances. These can be included for determining your max salary.
 
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