Tax on pensions/pensioners

I feel like I don't know much, but that I know a lot more than many of my peers in late twenties and early thirties with regards to money and future planning. I had not appreciated that social insurance falls away and that the level one starts paying tax increases around 65/66. And as such the value of shoving money into a pension is even bigger than I had appreciated.

I found a very interesting blog article, and would appreciate any further additional related information or caveats.

€550,000 – €1,000,000​

• €550,000 fund = €137,500 lump sum + €3,375 p/m (Income tax rate 4.44%)
• €600,000 fund = €150,000 lump sum + €3,500 p/m (Income tax rate 5.71%)
• €650,000 fund = €162,500 lump sum + €3,625 p/m (Income tax rate 6.90%)
• €700,000 fund = €175,000 lump sum + €3,750 p/m (Income tax rate 8.01%)
• €750,000 fund = €182,500 lump sum + €3,875 p/m (Income tax rate 9.03%)
• €800,000 fund = €200,000 lump sum + €4,000 p/m (Income tax rate 10.00%)
• €850,000 fund = €210,000 lump sum + €4,125 p/m (Income tax rate 10.91%)
• €900,000 fund = €220,000 lump sum + €4,250 p/m (Income tax rate 11.76%)
• €950,000 fund = €230,000 lump sum + €4,375 p/m (Income tax rate 12.57%)
• €1,000,000 fund = €240,000 lump sum + €4,500 p/m (Income tax rate 13.33%)

Click to expand...

Reference: thepensionstore.ie/but-pensions-get-heavily-taxed-in-retirement-right-wrong/

You're absolutely correct

PRSI drops away at 66
Annual income tax exemption €18,000pa per spouse
USC reduced for medical card holders
Still get a PAYE deduction for income from an ARF

Pensions are a great way to save


Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie

Pensions make so much sense in Ireland because most full-time workers will get relief at 41% on contributions, but face a much lower rate on drawdowns.