700k pot - pension draw down rules ?

C

cuttingthegrass

New Member
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I am a 45 year old director on a modest salary - 45k
I recently set up a master trust so I could back pay pension contributions that I missed over the years. Currently 200k in the pot.

My ambitious goal is to retire aged 55 with a 700k target. I also will qualify for full UK and Irish old age pension (If still there, touch wood) so a pot to get me from 55 - 67 is more or less all I really need.
My question is at 55 years old will I only be able to draw 2/3rds of my final salary annually?If so I will only be able to extract 30k per year?

Master trust is an occupational pension scheme so will the 2/3rds rule apply? If so I will be over funded.

If this is the case I am thinking of switching over to a PRSA. I will contribute no more than my salary to my pension and the PRSA will give me better draw down options/flexibility when the time comes. Master trust has done its job for me now by allowing me to "back pay contributions".

And if switching to the PRSA is it best to set up a new PRSA pension scheme and leave the master trust as it is?

Any advice welcome!
 
The 2/3rds rule is just part of the formula that determines the maximum contribution that your limited company can allocate towards your Master Trust each year. It doesn't play a part in the amount of income you draw down in retirement. If you have €700K at 55 then you'll presumably take your 25% lump sum of €175K and invest the remaining €525K in an ARF or annuity. If in an ARF you could withdraw 10% to 15% annually if you wanted. With an annuity the rate of income would be set at inception.

Kevin
www.thepensionstore.ie
 
cuttingthegrass said:
Master trust is an occupational pension scheme so will the 2/3rds rule apply? If so I will be over funded.
Click to expand...
When checking if you are over funded, the administrator will apply the 2/3rds rule, but you will be entitled to less than that as you are retiring early.
 
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