Taking early retirement benefits from an old scheme

[Bow tie]

Can anyone please advise on the wisdom of the following.
I am considering taking benefits from an old occupational pension scheme at age 50. I will continue working to build up my current pension plan to normal retirement.
The one I am considering 'retiring' will be about 100k. I am considering taking the 25k lumpsum to pay off debt costing currently 7%, and putting the remainder in ARF to remove 4k yearly to reduce mortgage debt in a shorter timeframe.
It will likely run out paying this, but by retirement I should have an occupational plan and the contributary pension.

 

[LDFerguson]

At a quick glance at what you've written, I'd support the idea of taking the 25% lump sum now to pay off debt costing you 7%.

I think you'd need to post more information before you'll get a meaningful response about the other €75,000. Are you currently paying tax at 40%? If so, then any amount you withdraw from the ARF will also be subject to tax at 40% as well as PRSI and USC so you'll lose roughly half of the withdrawal. You're not obliged to take any withdrawals from an ARF until the year in which you turn 61. There might be more efficient ways of going about this.

If you post more detail about your overall circumstances in the format used for the Money Makeover section, you might get a better response. https://www.askaboutmoney.com/threads/basic-information-required-for-the-money-makeover-forum.61289/

Regards,

Liam
www.FergA.com

 

[Bow tie]

Thanks Liam, thats really helpful and I hadn't considered the upper tax band, obvious thing to forget!