When to retire

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phoenix53

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Hi

I'm sure i've seen it discussed here before but cannot find the thread. Is there a "best" time (month) of the year to retire from a financial point of view?

Thanks
 
If you’re on PAYE, mid June is a good time as likely you’d be entitled to a tax refund the following January. But, don’t leave that get in the way of your proffered date of retirement. If you want to go, just go and don’t pay much heed to those who’ll inform you that you’ll need a small fortune to fund yourself for the most enjoyable part of your life. Remember, health is wealth and you have no idea as to when you’ll snuff it.
 
phoenix53 said:
Hi

I'm sure i've seen it discussed here before but cannot find the thread. Is there a "best" time (month) of the year to retire from a financial point of view?

Thanks
Click to expand...
My wife plans to retire from 31.07.25 but any retirement income she draws down in that tax year will be hit hard with PAYE and URC. So our plan is live on my pension and savings for the last 5 months of the year and starting an ARF for her on 01.01.26.

Another consideration is the deemed withdrawal rules for a new ARF. To avoid a full annual withdrawal (and tax) in year one, it’s necessary to delay drawing an ARF drawdown until 1st Dec. I’ve probably phrased that a bit awkwardly so better informed posters may clarify what I’m alluding to.
 
If you're a public sector worker on a defined benefit pension and you have an increment or pay rise coming up, you should wait and retire after you get it.
 
Given that your question says "from a financial point of view" you can take into account your earnings and tax situation too. E.G. doing enough months that you max earnings in the 20% bracket but don't pay any higher rate tax.

If you earn high money, staying until you earn 115K in the year for max pension contribution etc

I would definitely want to be done by end of May though if it was me to enjoy the summer!
 

Credited social insurance contributions

A credited social insurance contribution is a contribution given to you and recorded on your social insurance record. This page explains the rules on credited contributions for students, carers, homemakers, voluntary development workers and people who retire early.
www.citizensinformation.ie www.citizensinformation.ie

Per the link, if one takes up some work that pays prsi at class A in the year one retires, change of status credits can be applied to all other modified rate stamps paid in that tax year and also the previous one.

In my case I retired from AGS in October last year. I began working part time in November and continue to do so. I had fewer than 200 A rate contributions from prior employment so my aim is to continue as I am until I reach at least 520 A contributions.

By that time, the 93 or 94 change of status credits gleaned by retiring late in the year become reckonable. Whether or not they might bump me up from the lowest rung of the contributory pension ladder I can't say yet. I become eligible to apply in 2035.
 
phoenix53 said:
I'm sure i've seen it discussed here before but cannot find the thread. Is there a "best" time (month) of the year to retire from a financial point of view?
Click to expand...
Probably the point where you cross over from 20% marginal rate to 40%.

But hardly likely to be material in the scheme of things.
 
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