Pension plan advice please

A quick sanity check on plan below please.

One income family, soon to see kids go to college/need cars, still paying mortgage 2k per month.
I am now the wrong side of 50 and am thinking of switching jobs this year or next.
Current company pension will then cease, I will draw down 150k tax fee lump sum and put the rest into an ARF for growth.
This sum will be of far more use now than in 10 years time, so I am happy with this decision.

Will also use a good chunk of this lump to reduce mortgage when current fixed contract ends in 2027 (will be 140k due then) and aim to significantly reduce size of mortgage repayments at this time.
Plan to go back working for another 10 years approx., maybe less depending on fund growth.
Will be contracting then so will start a new pension (PRSA right?) and will aim to pull my remaining 50k tax free lump sum from this at final retirement.

Any stupid mistakes here or should this run smoothly, thanks in advance.

Your current fund is €600k, and you expect to build up a fund in your new employment of €200k within 10 years?

Bob Dillon said:

A quick sanity check on plan below please.

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In my opinion you would be better off doing a Money Makeover in order to get more targeted/specific feedback based on a more holistic understanding of your overall financial/personal circumstances.

Fortune said:

Your current fund is €600k, and you expect to build up a fund in your new employment of €200k within 10 years?

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I could draw down a larger lump sum initially but am keen to leave a 50k lump for later.
200k over 10 years in new pension should be fine on contributions alone, with fund growth on top.

Bob Dillon said:

could draw down a larger lump sum initially but am keen to leave a 50k lump for later

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Why take less lump sum than you're entitled to?

Bob Dillon said:

I could draw down a larger lump sum initially but am keen to leave a 50k lump for later.

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You don't get two bites at the lump sum from this pension. You cannot take €150k lump sum now and €50k at another date.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Steven Barrett said:

You don't get two bites at the lump sum from this pension. You cannot take €150k lump sum now and €50k at another date.

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They said they're switching jobs, so the €50k will be from the new job

Fortune said:

Why take less lump sum than you're entitled to?

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200k limit, 150 now/50 later so not missing out. Assumption here is a healthy 10 year run, is that your concern? You would take max now?

Bob Dillon said:

200k limit, 150 now/50 later so not missing out. Assumption here is a healthy 10 year run, is that your concern? You would take max now?

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Limiting your ability to take a pension lump sum taxed at 20%, rather than getting it out subject to PAYE.

Fortune said:

Limiting your ability to take a pension lump sum taxed at 20%, rather than getting it out subject to PAYE.

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Just to clarify, I presume that @Fortune is referring to this:

You can receive a tax free lifetime limit of €200,000 on retirement lump sums from all sources. The amount between €200,001 and €500,000 is taxable at the standard rate of tax (20%). Any amount in excess of €500,000 is taxed under Pay As You Earn (PAYE) at the marginal tax rate (40%).

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Fortune said:

Limiting your ability to take a pension lump sum taxed at 20%, rather than getting it out subject to PAYE.

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But is that relevant if we are aiming to keep our total pension drawdowns less than the threshold for the 40% tax rate (currently 88k I think) ?
That being the case, I would prefer to take what I need now, but leave as much as possible in the ARF so it can appreciate.

Bob Dillon said:

But is that relevant if we are aiming to keep our total pension drawdowns less than the threshold for the 40% tax rate (currently 88k I think) ?

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This would be in addition to the 20% PAYE threshold.