PRSA Retirement Age query

R

Redzer

Registered User
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Hi,

Mrs Redzer has just signed up for a PRSA and was asked what her retirement age would be. She is 52 and would like to be able to retire at 60 if possible so she gave that answer. Does that answer actually affect the drawing down of the PRSA in due course as she is over 50?

She may still need/want to work past 60 so can the PRSA still remain in place and take contributions after she turns 60?
She can probably still change it to 66 as its still open to correction but would she then not be able to avail of it until she was 66 even if she does retire earlier?
I believe you can draw down a PRSA at any stage after 50 subject to tax? She has no other pension but I hope to have enough for both of us in time.
Even if she does retire at 60 can she leave the PRSA grow until she wants to get a lump sum / have ARF?

Apologies if I'm overcomplicating it but we don't want to be locked in/out unnecessarily.

Thanks for any feedback
 
She can take early retirement from a PRSA from 50 onwards if she leaves the PAYE employment where the PRSA contributions came from.

From 60 onwards she can retire the PRSA while continuing to work in the job if she chooses.

Even if she selects 60 as the chosen retirement age now, she can change that at any time to any other age between 60 and 75. Equally if she selects 66 as the retirement now, she can still choose to retire at any age between 60 and 75.

If she chooses a default investment strategy which dials down the risk as she approaches retirement age, the strategy will assume that she's retiring at whatever age she put down on the form. So that's probably the biggest implication of the selected retirement age.

Regardless of what age she retires the PRSA, she can take 25% of the fund as a lump sum (tax-free up to €200,000). With the other 75% she either buys an annuity or reinvests in an ARF and ARF withdrawals are her pension. Either way, annuity income or ARF withdrawals might be taxable depending on what other income you have as a couple. Normal Income Tax rules and rates.
 
I remember asking this question many years ago when filling in a pension proposal form. I also remember that the answer was quite obtuse.

If I were in Mrs L’s position I would ask the the sales person the following question, preferably in writing and requesting the answer in writing also: “What are the implications if I answer 60 now, but later on decide not to retire until I reach 66, and secondly, what are the implications if I answer 66 now, but later on decide to retire at 60.“
 
there is no implications. Once you hit 60 you can retire it. its more than likely SORP related so that you can get an idea of expected values at a particular date in the future.
 
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