Have you worked out how much of a pension pot you require to retire at age 50? ...
Id imagine that getting to that pot/income will involve maxing out contribution rather than switching from active to passive funds for the purposes of fees.
Really depends on your expected marginal tax rate in retirement.Thinking further about this, after the 200k lump sum, is it better to pay the 20% on the next 300k, or leave it in an ARF?
I tend to favour Option 2, as it gives more flexibility, but haven't run the numbers yet.
- Option 1: ARF of 1m (subject to income tax and 4/5% minimum drawdowns), and 200k investment pot subject to CGT.
- Option 2: ARF of 700k, and 440k investment pot
Thinking further about this, after the 200k lump sum, is it better to pay the 20% on the next 300k, or leave it in an ARF?
I tend to favour Option 2, as it gives more flexibility, but haven't run the numbers yet.
- Option 1: ARF of 1m (subject to income tax and 4/5% minimum drawdowns), and 200k investment pot subject to CGT.
- Option 2: ARF of 700k, and 440k investment pot
CorrectIsn't the max you can take as cash 25% of the fund value??
So If you have a pension pot of €1m then the 25% = €250k. you need €2m pension pot to get €200tf + €300@20%
Therefore for €1m you "only" have 200k tax free plus 50k at 20%
The Pensions Authority:Isn't the max you can take as cash 25% of the fund value??
So If you have a pension pot of €1m then the 25% = €250k. you need €2m pension pot to get €200tf + €300@20%
Therefore for €1m you "only" have 200k tax free plus 50k at 20%
Doesn't that suggest the cash limit, strictly speaking isLump sums between €200,001 and €500,000 are taxed at 20%,
unless you have avc’s
No.Doesn't that suggest the cash limit, strictly speaking is
200k plus 0.8 times 300k plus fully taxed remainder if so choose
So maybe as per OP he might choose option 2
200 +240 = 440
No.
The overall lump sum limit is either 25% of the fund OR 150% of Final Salary (in which case you must use the residual fund to buy an Annuity- current rules).
So if the estimated fund is €1m, then the 25% gives a lump sum of €250,000. The first €200,000 is tax free and the extra €50,000 is taxable at 20%. So a net €40,000, giving a total lump sum of €240,000.
And will 1.2m be enough for a potential 40 year retirement. After lump sum you would be left with an arf of 900k. With such a long retirement what would be a safe withdrawal rate? 2% or 3%. At 3% that would be 27k per annum. Will that be sufficient?
Not really sure what you mean by “take control now”? I assume that within your existing structure you have a choice of funds, so to that extent you can control the fund mix as is.
As for increasing the Bond mix, current Bond yields are extraordinarily low, so any increase in the Bond yield will result in a lower capital value. Bonds do well when Interest rates are falling. But how much lower can rates go Over the next 10 years? Bonds are not necessarily a lower risk option than Equiries.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?