Recently retired - financial query

S

Sorcon

New Member
Messages
3
I am 63 and have recently retired from PS with Class D pension of €19,000(job shared so not full pension). I also have rental income of €12,000 per year and I pay tax of about €6,000 per year. I received a small pension from ex partner (€130000 which has been put into ARF.). I plan to start drawing down €5,000 per year from this next year. I have about ten class A stamps from years ago.

Can anyone advise if I may be entitled to a partial state pension at age 70 due to paying tax on rental income and drawing down Arf? I've only recently read about class S contributions and am a bit confused as to what I need to do or if indeed I might be entitled to anything.
 
you currently need a minimum of 520 stamps to be eligible for a portion of state pension.
 
When you job shared did you care for your young children? You may be able to get credits from the Homemaker scheme but you still need 520 paid contributions to qualify.
 
Yes the job sharing was due to childcare. I will check out Homemaker scheme. Thank you.
 
With your rental income + an ARF you will get 52 class S per year.
Try to get your ARF set up this year. This will get you an extra 52 class S for 2024.
Have you checked your Prsi record ? You might have reckonable ORD or class A contributions from pre establishment.
If you currently have only 10 reckonable contributions you will be unable to reach the minimum 520 level before age 70. However you can reach the 260 level needed to qualify for a pro rata pension.
If you get 1 class A contribution immediately you will gain an extra year of change of status reckonable contributions.

Read this thread for more information.

Key Post - PRSI and planning retirement

This Key Post is in the form of a FAQ where I don't know many of the answers. I will update the post as I get answers. 1. PRSI payable on reaching state pension age Answer: 0 (Class M) 1a. Does this relate to the start of the tax year in which you become 66? Or to after your birthday? Answer...
www.askaboutmoney.com
 
Thank you for the information S class. Financial advisor suggested waiting until next year to drawdown ARF to avoid 40% tax. I will look at the figures again.
 
Sorcon said:
Thank you for the information S class. Financial advisor suggested waiting until next year to drawdown ARF to avoid 40% tax. I will look at the figures again.
Click to expand...
Firstly you should check out your Prsi record. What you want to find out is how many reckonable paid contributions you currently have.

If there is any possibility that you could reach 520 paid contributions before age 70, you should persue this target.

If there is this possibility, would the extra 52 class S be essential to reach the target ?

If the 520 before age 70 is impossible also check if the extra year of class S would allow you to reach a target of 260 paid contributions earlier before age 70.

The extra 52 class S will get you to your 260 target 12 months earlier.
This will allow you to claim your pension 12 months earlier.
The moment you reach either target is the time you can claim your pension.
This gives you one extra year of pension payments.
Remember that although you will pay 40% tax on the immediate ARF, this only represents a loss of 20%, as ultimately you will be liable to 20% tax on that drawdown.

Don't follow the advisor's advice unless either target is reachable by age 66 without the extra year of class S.


If you are not starting your ARF until 2025, you would gain two extra years of change of status credits by getting 1 class A paid contribution before the end of 2024.
Employment for 3 hours at basic pay rate is all that is needed to gain 1 class A stamp.
 
Last edited:
You must log in or register to reply here.
Back
Top