Retired at 58. Maximum % withdrawal from pension.

D

Daddy Ireland

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Someone has retired due to ill health and has monies in an ARF/AMRF totalling 130k from a company pension.

I think one can withdraw at least 4% of both pots as retired early due to ill health. If that person wishes to withdraw a higher % annually that would all be subject to 20% tax rate is there a limit to the % that can be drawn annually.. This individual would be able to take at least 10% annually and stay within the 20% tax band. Is it allowable ?
 
Person is aged 57. I see so if pot ARF is 65k and AMRF is 65k and individual needs a total of 13k for say next 5 years to come.

I assume this person can take 15% ARF being 9.75k and 4% AMRF being 2.6k each year if so wishes.
 
Just to clarify a few things about this...

If there is money in an AMRF and ARF, the rules regarding withdrawals are not affected by whether or not the retirement was due to ill-health. The same rules apply as for someone who retired without the ill-health aspect.

You can choose to take up to 4% per year from an AMRF and no more. You can choose to take nothing.

At age 57, you can choose to take any level of income you like from an ARF. No upper limit. You can choose to take nothing. (It's not until the year in which your acquaintance reaches 61 that minimum withdrawals from an ARF start to kick in.)

Any income drawn from either the AMRF or the ARF is taxable under normal Income Tax rules, so the usual tax bands and tax credits apply and if there is other taxable income, it will need to be included in any taxation calculations.

At age 75, the AMRF becomes an ARF. If earlier the person acquires guaranteed lifetime income (e.g. an annuity or the State Pension) of at least €12,700 per year, the AMRF becomes an ARF.

Regards,
Liam
www.ferga.com
 
LDFerguson said:
Just to clarify a few things about this...

If there is money in an AMRF and ARF, the rules regarding withdrawals are not affected by whether or not the retirement was due to ill-health. The same rules apply as for someone who retired without the ill-health aspect.

You can choose to take up to 4% per year from an AMRF and no more. You can choose to take nothing.

At age 57, you can choose to take any level of income you like from an ARF. No upper limit. You can choose to take nothing. (It's not until the year in which your acquaintance reaches 61 that minimum withdrawals from an ARF start to kick in.)

Any income drawn from either the AMRF or the ARF is taxable under normal Income Tax rules, so the usual tax bands and tax credits apply and if there is other taxable income, it will need to be included in any taxation calculations.

At age 75, the AMRF becomes an ARF. If earlier the person acquires guaranteed lifetime income (e.g. an annuity or the State Pension) of at least €12,700 per year, the AMRF becomes an ARF.

Regards,
Liam
www.ferga.com
Click to expand...
Liam
With the above pension pot would person have to park funds in AMRF. They might have Disability or Invalidity pension of 11k per annum. Would this income coupled with ARF income enable person to avoid AMRF? Cheers.
 
KOW said:
Liam
With the above pension pot would person have to park funds in AMRF. They might have Disability or Invalidity pension of 11k per annum. Would this income coupled with ARF income enable person to avoid AMRF? Cheers.
Click to expand...

To avoid the requirement to put €63,500 into an AMRF, you must have guaranteed lifetime income elsewhere of at least €12,700 per year. Invalidity pension can be included in this but disability benefit cannot. Withdrawals from an ARF can't be included in this €12,700 calculation either. So if the person is getting an Invalidity Pension of €11,000 they'd need to have another guaranteed lifetime source of income of €1,700 per year.

Remember that an AMRF is not just parked or frozen. It can be invested in the same choice of funds as the ARF and withdrawals of up to 4% per year are permitted.
 
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