Prsi voluntary contributions after early retirement

Very informative thread. Thanks for starting it spud50. I had no idea you could buy stamps.

I am 36yrs paying a D stamp, prior to that I had 1.5yrs of A

I am leaving my job later this year, (unofficial early retirement) at age 55 and can draw my DB pension at 60. I do not think I will work in the next 5 yrs. Like the OP I am burned out.

From now to then I will have more than 5k unearned income every year which this thread has informed me converts to S class stamps if there is no other income.

I also have an AVC. I have yet to decide how to draw that down. Maybe an ARF is the way to go based on this thread.

Is there any benefit of me paying a voluntary contribution? I have paid a lot of tax and it would be nice to get some back!
 
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You will not be allowed to pay a voluntary contribution in any year that you have 52 paid reckonable contributions. Provided you have investment income over 5000 euro you will get 52 S class in those years. Therefore you are okay to age 60 with 5000 euro investment income. Make sure to open your ARF at age 60 and begin withdrawals immediately. If you don't do this your investment income will change to K class as your pension is M class. With the ARF and investment income you will have 52 S class to age 66.
Be aware that if you take up any employment at age 55 to 60, even one week all your investment income for that year will convert to 52 K class Prsi and these are not reckonable for the contributory pension.
You should not need to make any voluntary contributions.
You also have the option of having an Annuity and an ARF at age 60.
If the S class contributions continue to apply to ARFs it would be a good idea to make sure to have an ARF, even a relatively small one.
 
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@bstop can you explain why the one week of employment income between ages 55-60 would cause all the investment income to be class K? Would that include ARF income, or is that always class S?
 
ARF income is always Class S. You can have earned income in any year and the ARF income stays at class S.
The problem is unearned income.
If your only source of income is unearned and over 5000 euro per year it is class S.
However if you have any earned income then your unearned income is changed to class K.
I don't know why Irish citizens are subjected to these rules. They are unfair and propably result in the loss of pension benefits to many people.
 
@bstop
Thank you for your detailed reply. I do not understand the PRSI system at all. It does irk me that I have paid a lot of PRSI with no entitlement to benefits.
 
Luternau said:
@bstop
Thank you for your detailed reply. I do not understand the PRSI system at all. It does irk me that I have paid a lot of PRSI with no entitlement to benefits.
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I worked in the public sector as well.
I took a severance package 9 years ago.
I have had various mixes of unearned income. ARF income, occupational pension income and earned income in each of the past 9 years. I have also had A class credits for most of the past 9 years. This is how I have gained knowledge of our ridiculously complicated Prsi system.
In any of those years the A class credits do not result in the unearned income reverting to K class.
In your situation it would be worth your while to get one 'A paid' contribution after you retire by working and earning at least 38 euro in any week after you have retired and before the end of this year.
You could then sign on for A credits until you at least reach age 64. If you then worked and earned at least 38 euro per week for 13 weeks during the calender year of your 63rd birthday you would get the 13 paid A contributions needed to qualify for 65s benefit.
 
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@ClubMan
I was just repeating what I was told and is the belief of many that pay class D. That lost is not a lot. It may be decent if they included optical or dental or medical card, but they don't. What is included is almost what a welfare state has to provide, nothing more than that. Not all D class employees are highly paid or well off.. The state could do better if it wanted. Look at what is paid out to people that never worked or don't want to. Subject for another thread but people who work and pay PRSI should have the same access to many state benefits. Its not my area of speciality but I am aware that people are sometimes better off on benefits than working, so choose the former.
 
Spud50 said:
just as a follow up , i did retire at the end of Jan this year .
I currently have 1940 Credits to date , if i draw down a pension ARF in 4 years time and then paid S contributions for 6 years as part of that ARF, then presumably i would have more than 2080 Credits so I reckon i should be eligible for the full pension and wont need to pay any voluntary contributions. (correct me if im wrong)
however i would then have a 4 year gap in my stamps / credits record.... Does this matter to Welfare or cause any problem that i need to address??.
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The gap in contributions will result in you losing some years of treatment benefits (optical and dental) you could avoid this by signing on for jobseekers credits.
 
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