On my service record, which I recently received from my employer Department of Education as I'm a post primary teacher, I can purchase back a fair bit of service under the PCW. The total cost of this comes to about 9K. The service record assumes that I'll use my lump sum to purchase this. However, today I had a consultation with a financial advisor who advised me to take the 9K from my AVC. I don't fully understand why but this financial advisor is a bit biased against AVCs. My AVC is with Zurich.
To clarify. I'm retiring this year at pretty much full 40 years service [thanks to notional service] and my lump sum is about €110 K. I have a very small AVC fund of about €35K which will go straight into an ARF to give me a little more income on retirement.
So is it a good idea to take the 9K from this small fund or should I take it from the lump sum? I'm not at all clear on the tax implications. My pension will not be big and even drawing down an ARF, I should still be under the annual 40K and hence in the lower tax bracket. I would really appreciate other opinions/perspectives? Thanks a lot.
To clarify. I'm retiring this year at pretty much full 40 years service [thanks to notional service] and my lump sum is about €110 K. I have a very small AVC fund of about €35K which will go straight into an ARF to give me a little more income on retirement.
So is it a good idea to take the 9K from this small fund or should I take it from the lump sum? I'm not at all clear on the tax implications. My pension will not be big and even drawing down an ARF, I should still be under the annual 40K and hence in the lower tax bracket. I would really appreciate other opinions/perspectives? Thanks a lot.