Key Post My pension pot has reached €800k - should I stop contributing ?

You are of course correct. I wasn't focusing on the exact mathematics more the practical principles.

We like to paint pictures to illustrate the points. This is a real client's ARF account over the last 5 years. The original capital is the red line showing the annual distributions coming off each year and the blue line is the account value. Working perfectly...

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Best options for short term liquidity is still State Savings I recently updated my analysis here

to reflect the new less attractive, but still relatively good (compared to the bank) terms

Longer-term taxable investment accounts are best managed with a pure equity portfolio of non-EU ETFs and dial down the risk in the pension to accounts to compensate

That example is both fascinating and reassuring Marc. Thanks for sharing.
What income are they drawing from it?
 
That example is both fascinating and reassuring Marc. Thanks for sharing.
What income are they drawing from it?
The account is under €2m and the investor under age 71 so 4% is the imputed distribution rising to 5% for no good reason (other than to soak more income tax) at age 71
 
Longer-term taxable investment accounts are best managed with a pure equity portfolio of non-EU ETFs and dial down the risk in the pension accounts to compensate
I would be interested in understanding your thinking here.

With ultra low (or negative) interest rates, I would have thought it would be more efficient to hold cash and/or fixed income instruments in taxable accounts and equities in tax-deferred pension accounts.

Interest rates on cash deposits in pension accounts are currently negative (and attract fees), which is not the case with retail deposits.
 
Hi all,

So my pot has reached over 800k. I have 3 separate pensions. 2 pension properties and a PRSA with 200k in cash. 100k in rent accounts associated with the pension properties.

I am now over 50 and I am the sole director of my own company.

Can I plan an exit now at 50 and take the 25% and 200K tax free lump sum??. I have a purpose for the money.
 
What type of arrangements are the two pension properties contained in? SSAPs? PRSAs?

Are the two properties in arrangements related to your employment with your own company?
 
pension 1 = PRB
pension 2 = SSAP (I'm going to change this to a PRSA)
pension 3 = New PRSA based on the new rules
 
Am I correct in assuming that your wish is to withdraw €200,000 tax-free lump sum and leave the two properties alone?

  • Is the PRB related to your current employment in your own company?
  • Can you split out the values of 1 and 2, e.g. "Pension 1 - property value €W + cash €X, Pension 2 - property value €Y, cash €Z" You've already said that Pension 3 is €200,000 in cash.
 
yes you are correct. They are taking in a nice amount of rental income.

The PRB is related to an old employment, not related to my current Company

PRB = 360K Apartment (might be 380K) + 70K cash in bank
SSAP = 150K Commercial Unit (might be 180K) + 25K in bank
PRSA = 200K cash in Bank (new on a decent rate of interest until I see what I might invest in)

So the cash is there for the 200K TFLS. I'm 50+, why not?? is there a downside??
 
What is your plan after you withdraw the cash?
Will you continue to work?
And pay into a pension?
You're hardly going to retire at age 50?
Do you have to change employment?
 
I have other rental income with a decent monthly rent roll.
I have no mortgage payments etc.
I will use the pension cash for lifestyle. while the pension properties contine to grow cash. (Do these move to an ARF)
I'm single :)
And yes i will probably start another company, professional services. (can this be done easily?)
My attitude is to spend it all, as most guys I know just look at figures at the end of the page and worry about them!!
 
What you're looking to do is possible but there will be a fair bit of paperwork involved.

  • Transfer the PRB into the SSAS.
  • Wind up the SSAS and transfer it and the PRSA into a self-administered PRSA (if the existing PRSA is not already a self-administered PRSA).
  • Everything will then be in a PRSA. Retire this PRSA, withdraw 25% as a tax-free lump sum and leave the balance as a Vested PRSA. You will need to start drawing a 4% annual income from the Vested PRSA from the year you turn 61.
That's how it could be done. I don't anything about your personal circumstances to comment about whether or not it should be done. I'd have a concern about your being heavily reliant on rental income and property.

Regards,

Liam
www.FergA.com
 
What you're looking to do is possible but there will be a fair bit of paperwork involved.

  • Transfer the PRB into the SSAS.
  • Wind up the SSAS and transfer it and the PRSA into a self-administered PRSA (if the existing PRSA is not already a self-administered PRSA).
  • Everything will then be in a PRSA. Retire this PRSA, withdraw 25% as a tax-free lump sum and leave the balance as a Vested PRSA. You will need to start drawing a 4% annual income from the Vested PRSA from the year you turn 61.
That's how it could be done. I don't anything about your personal circumstances to comment about whether or not it should be done. I'd have a concern about your being heavily reliant on rental income and property.

Regards,

Liam
www.FergA.com
 
Thanks Liam, your advice is always taken on board.
So, if I go this route, and retire the self administered PRSA, can I continue working at my existing company?? Is it possible to set up a new Prsa under the new rules and contribute to that pension??
 
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