Retired A Contributions with Suplementary Pension - Spouse retiring D Contributions

[DingDing]

Hi,

Thanks for all the help so far, it has been great, I retired a few months ago and getting supplementary pension. All going well thanks to all the help here.

The Pensions dept have confirmed that they count self employment as having S contributions. We are jointly assessed for tax.

We have a rental property which will generate a taxable income in about a year to 18 months as the current rent is offset by the expenses since we purchased the property.

My wife is looking to retire at 60 and plans to use (thanks to the advice here) the rental income with some earned income to accumulate reckonable contributions.

She is a public servant who is on D contributions. As she had a number of A contributions before joining the public service she could get a small contributory pension if she had reckonable contributions between 60 and 66.

I suppose the issue is that if we remain jointly assessed, would the rental income give me S class contributions which would deem me self-employed WRT the supplementary pension, and I would lose the entitlement to the supplementary pension.

Any ideas on how to proceed. Any advice as always much appriciated.

 

[ClubMan]

I'm confused - how does the thread title:

Retired A Contributions with Suplementary Pension - Spouse retiring D Contributions​

relate to your post which doesn't mention class D contributions at all?

 

[S class]

My wife is looking to retire at 60 and plans to use (thanks to the advice here) the rental income with some earned income to accumulate reckonable contributions.

Does your wife have AVCs ?

The Prsi on her rental will convert to non reckonable class K if she has income from an occupational pension or class A employment.

If her earned income is from self employment she will get class S from her rental income.

Her rental will also remain at class S if she has ARF drawdowns.

 

[S class]

I suppose the issue is that if we remain jointly assessed, would the rental income give me S class contributions which would deem me self-employed WRT the supplementary pension, and I would lose the entitlement to the supplementary pension.

Again if you don't have an ARF your rental income will convert to class K because you have income from an occupational pension. Class K is not self employment.

If you have an ARF with drawdowns of over 5k you are already considered as having unearned self employment.

Does your ARF stop your supplementary pension ?
I am not certain about this but I don't think having an ARF prevents a person from getting supplementary pension.

If this is correct I would guess that other unearned self employment (rental) wouldn't prevent you from getting supplementary pension.

 

[DingDing]

That’s Great @S class I just modified the first post to give more detail on my wife’s situation. Apologies. I was probably asking 2 questions in one.

The K contributions are great as it doesn’t impact the supplementary pension.

I’ll look into this further. Her retirement date is a couple of years out.

 

[CharlieMac]

@DingDing I re-read some of your previous posts about your rationale with your rental property.

You seem confident that it worked out to be a good investment.. what it cost you to keep making the mortgage payments and what you could sell it for now.

But your rental income is low and you must bare all the related risks of investing in property. I could read a hundred other posts on here and be convinced that you should have been putting all your money in to equities all along.

I don't know if ignorance is bliss or maybe a certain amount of blinkers-on is needed to be ok with whatever savings and investment decisions we make.

I dunno, maybe you made the wrong choice but maybe it doesn't matter. Sticking with your rental didn't produce a terrible outcome in your case so as long as you are happy about it what else matters.

 

[DingDing]

@CharlieMac It is great to look back with the benefit of hindsight. As 20 years ago the market was strong and no mention of the Rent Caps. Part of the rationale at the time was if we were to downsize, the property is in a location and of a design at that time I would have down sized to it. Nearby, on bus route, beside a shop etc. As you get older things like your own outside space become important. Having the cushion of the property gave me the confidence to retire a couple of years before I would have.

It worked out for me anyway. The K contributions is a great help as it won’t impact the supplementary pension thanks for that @sclass and it gives us other options to get contributions to the contributory pension for my wife.

Getting good tenants is key to managing the risk.

 

[CharlieMac]

It does seem pretty handy where a couple are jointly assessed for tax purposes that their rental income could build up s class prsi contributions for both of their coap pensions, not only one or the other.