Should I buy years or contribute to an AVC/PRSA?

Slim

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She will be a few years short of 60. I was wondering if she could preserve her benefits but draw on the ARF for a few years without drawing her occupational pension.

I think she must draw a minimum 4% pa from her ARF.

My understanding of cost neutral early retirement is that you have 2 choices, take the reduced pension now or preserve until minimum retirement age,no in between. Is that correct?
 

Early Riser

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There are two options for early retirement - either cost neutral (also referred to as "actuarially reduced") to be drawn down immediately, or a preserved pension to be drawn down at normal (minimum) retirement age. There is no in between.

If she opts for the preserved pension I don't think she can access her PRSA AVC pot until her preserved pension age (presumably 60).

She can access the pot immediately if she opts for cost neutral early retirement. After age 60 (from year of 61st birthday specifically) she has to draw a minimum of 4% from the fund - but not before this.
 

Slim

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Thanks a million, ER, that fits in with my understanding of the schemes. However, I didn't know this
"After age 60 (from year of 61st birthday specifically) she has to draw a minimum of 4% from the fund - but not before this."

Can I clarify, even if she takes CNER from age 55, she can hold off on drawing down ARF until 60?
 

Early Riser

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Can I clarify, even if she takes CNER from age 55, she can hold off on drawing down ARF until 60?
Yes, she can hold off from drawing down anything from the ARF until 60. But she must transfer the money from the AVC to the ARF when she is retiring (if opting for the ARF route). She can use some of the money from the AVC fund to top up her tax-free lump sum to revenue limits at retirement (or, indeed, all of it if revenue limits allow) - this is the most advantageous from a tax point of view. The remainder of the fund is then transferred to the ARF.
 

Slim

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Many thanks, Early Riser, that is very useful information. I have written to her prsa provider to seek guidance on the process. Thanks again. Slim
 
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