Best way of supplementing lump sum pension with AVC for early retirement - Pre 95 Civil Servant

[gazzer]

Hi everybody.

Apologies if this has been asked before but I am working in the Civil Service and am considering taking early retirement next year on my 53rd birthday. I used the cost neutral early retirement modeller and based on my current salary of 61,500 approx. I would get a tax free lump sum of 66,000 plus an annual pension of 17900. I am wondering if there is a way of putting a lump sum of money into a AVC before the end of this tax year to make up the difference between what I would get as a lump sum at 40 years service (61,500 x 1.50) 92,250 and the 66,000 I would get if I retire at 53.

If I have my figures correct and borrowed the 26,250 to buy an AVC it would only actually cost me 15,750 with the tax relief so I could potentially have a lump sum payment of 66,000 + (26,250 - 15750) which would give me approx 76,500. Am I correct and if so what would be the best AVC to do this with.

Thanks

 

[Early Riser]

I am wondering if there is a way of putting a lump sum of money into a AVC before the end of this tax year to make up the difference between what I would get as a lump sum at 40 years service (61,500 x 1.50) 92,250 and the 66,000 I would get if I retire at 53.

You can't top up the tax free lump sum to this maximum in the case of early retirement. Revenue has reduced limits in the case of CNER.

You don't say how many years service you will actually have at 53 but lets say it is 29 (and if you continued until NRA at 60 you would have 36). In that event the maximum allowed would be 92,250 * 29/36 = €74,312. So a top up of just €8,300 with a potential tax saving €3,320 (minus whatever fee the AVC provider charges).

 

[S class]

Check out my previous posts on this subject. Retiring at age 53 gives you the potential to gain credited or paid A, or S class Prsi until age 66. This could allow you to qualify for a partial contributory pension.

 

[gazzer]

You can't top up the tax free lump sum to this maximum in the case of early retirement. Revenue has reduced limits in the case of CNER.

You don't say how many years service you will actually have at 53 but lets say it is 29 (and if you continued until NRA at 60 you would have 36). In that event the maximum allowed would be 92,250 * 29/36 = €74,312. So a top up of just €8,300 with a potential tax saving €3,320 (minus whatever fee the AVC provider charges).

Thanks for the reply. I will have 32 years service if I retire next year. I will work out that calculation based on that. Appreciate that.

 

[gazzer]

Check out my previous posts on this subject. Retiring at age 53 gives you the potential to gain credited or paid A, or S class Prsi until age 66. This could allow you to qualify for a partial contributory pension.

I was considering that also. I dont just want to retire and not work in some capacity. I am currently studying Data Analytics so I would like to move into that area in a part time capacity next year. If my age is against me for jobs in that market I would work in a shop or anywhere really on a part time basis so that by the time the retirement age for a state pesion comes I could potentially be elegible for a small contributory pension. Thanks for the reply.