PRSA/DB Pension

[Mary Kelly]

I'm about to take out a PRSA to avail of the Gov. top up of 2500.00. Investing lump sum of 7500 and intend to leave for 2 yrs no more. My question is: I intend next year to draw down my pension and will get a tax free lump sum. Will this affect my PRSA when I want to cash it in? I'm told that I might not be able to get two tax free lump sums and that my PRSA would be rolled into my pension. Both pension and PRSA will be with the same company. Thanks to everybody I sure have learned alot from this site. I read it twice three times a day if I have time. Mary

 

[ClubMan]

I'm about to take out a PRSA to avail of the Gov. top up of 2500.00. Investing lump sum of 7500

You will actually get more than €2.5K since you also get a portion of your SSIA exit tax back too.

See [broken link removed].

What is the incentive?

The incentive has two features.

Firstly: for every €3 of SSIA proceeds reinvested by an eligible SSIA holder in a pension product, the Exchequer will contribute €1 by way of a tax credit. This tax credit cannot exceed €2,500.

Secondly: the Exchequer will contribute an additional tax credit to the pension product. This additional tax credit will be a percentage of the tax deducted from the SSIA on maturity. If the SSIA holder reinvests all (100%) of his/her SSlA proceeds then the additional credit will be all (100%) of the tax so deducted. If he/she reinvests one half (50%) of the SSIA proceeds in a pension product then the additional tax credit will be one half (50%) of the tax so deducted - and so on.

Please read this thread too before choosing a PRSA provider:

Execution only PRSA - but Entry charge for SSIA

Sorry I can't answer your main questions!

 

[Guest126]

Mary - will you get the rev max tax-free lump-sum from your main pension?