Maximising Pension

M

Mini3277

Registered User
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Quick question for the pension guru's out there.

An individual who upon retirement will have a maximium Public Sector Pension (i.e. 40/80) is looking at boosting her pension up. I think the maximum she could boost her pension to would be from 50% (40/80) to 66%....

She's looking for suggestions on what type of product she should be looking at...

Flexibility is key (she might decide to transfer fund to ARF upon retirement, if possible) and possible estate planning (how fund could be transferred to next generation).
 
Revenue maximum 66% includes provision for tax-free lump sum. Public sector 40/80 is in addition to 120/80 lump sum.

Her options to maximise funding are limited to the difference (if any) between Revenue definition of final salary and scheme definition.
 
Mini3277,

Your colleague really only has 3 options to top-up her pension. She can make contributions to her union-endorsed AVC, an advice based PRSA AVC via a broker (i.e. following a consultation) or via an execution-only PRSA AVC from a discount broker.

From an estate planning perspective she could transfer the AVC into an ARF at retirement and withdraw only the minimum amount from the ARF (3%) each year in order to leave as much in the fund growing free of tax to pass on eventually.

The main factor to consider before investing is what level of tax relief she will receive on her contributions compared to the level of tax that is likely to be paid when funds are withdrawn from the ARF as income or inheritance. They will either be subject to income tax or Capital Acquisitions Tax (depending on who is in inheriting the fund).

Regards,

Andrew

http://www.squaremile.ie
 
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