Use of AVC/ARF to retire before 60

M

mcauleyej

Registered User
Messages
9
Hi,

I am lucky enough to have a DB pension that allows me to retire at 60. I'm contemplating "resigning" earlier and am wondering would an AVC/ARF arrangement allow me to do this tax efficiently. I realize that by resigning earlier that I would lose service and that this would reduce my DB pension but I could use my lump sum to top this up.

My question is, could I make AVC payments between now and 55 (up to 30% of my salary), take the 18% tax benefit (save 40% now and pay 20% + 2% USC when I withdraw the money) and any growth (untaxed) and turn this into an ARF at 55 to tide me over to 60 when my DB would be paid? Would the AMRF rules apply? I.e. as I won't have any income between 55 and 60 would I have to put €63,500 into an AMRF and how much of this would I be able to drawdown, 4%?

Thanks.
 
You have to mature the AVC's at the same time as the DB pension, you cannot access them earlier on their own.

You can take a transfer value from the Defined Benefit pension. mature that, take 25% tax free lump sum and invest the remainder in an ARF. You are obviously foregoing a guaranteed pension so you would need to assess the pros and cons of both options before making such a decision.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Hi Steve,

Could one not retire early on a cost neutral basis and have the AVC coordinated, this would obviously be a decision made well in advance of retirement and I wonder could there be sufficient contributions in the avc to maximise both the lump sum and coordinated pension (post 94)

R
 
Hi Steve,

Apologies for the confusion to all, yes that would be correct maybe I was explicit enough, I was wondering could this be done well in advance thus planning on taking DB at 60 and accessing avc's earlier
 
allaround said:
Hi Steve,

Apologies for the confusion to all, yes that would be correct maybe I was explicit enough, I was wondering could this be done well in advance thus planning on taking DB at 60 and accessing avc's earlier
Click to expand...

No, you can't access your AVC's in advance of the DB scheme.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
All,

Thank you for all your comments. I'm not public sector and so "cost neutral" does not apply. My DB does not pay out until 60. I was indeed asking if I could access AVCs in advance of the DB and Steven thank you for your very clear answer, even if it wasn't the one I was looking for.
 
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