Turning 50, pension lump sum?

D

Designjet

Registered User
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Hi all, so I'm turning 50 soon, I have an older pension which is self directed part of an apartment in Dublin, with solid rent and no borrowings. Say the apartment is valued at 400k and there is 100k in rent account, total 500k, can I take 25% lump sum, 125k and take the remainder of the lump sum from my exec pension at 60 years of age, ie, draw down the 200k lump sum in stages?
 
Just making sure I have this clear, so please correct me if I'm picking this up wrong. You have a self-directed pension plan which owns an apartment and has a bank account. You also have a separate Executive Pension plan. You mention that the former is an "older pension". Do the two plans relate to the same employment?
 
correct on the first 2. the plans dont relate to the same employment. one when I was an employee and the current ssap is a new executive pension funded by my limited company.
The one in question just receives rent from the dublin apartment.

Thanks
 
If the one with the apartment relates to a previous employment and you've nothing to do with that employer anymore, then yes you can do what you're suggesting at age 50. You can retire this pension plan, withdraw the cash as your tax-free lump sum and transfer the apartment into a self-administered Approved Retirement Fund (ARF). If there's only €100,000 in the bank account then you may not be able to extract the full 25% as €500,000 x 25% = €125,000, but maybe there will be enough in the bank account to sort this by the time you hit 50, or you could wait until there is.

Then at 60 you can retire your newer pension plan and withdraw 25% of its value as a tax-free lump sum.

First €200,000 of all lump sums taken is tax-free. From €200,000 to €500,000 is taxed at 20%.

There's another method of calculating the lump sum, relating to your salary and service, which can sometimes work out better than 25% of the fund. You should ask your broker to calculate using both methods before you make your final decision.

Regards,

Liam
www.FergA.com
 
LDFerguson said:
If the one with the apartment relates to a previous employment and you've nothing to do with that employer anymore, then yes you can do what you're suggesting at age 50. You can retire this pension plan, withdraw the cash as your tax-free lump sum and transfer the apartment into a self-administered Approved Retirement Fund (ARF). If there's only €100,000 in the bank account then you may not be able to extract the full 25% as €500,000 x 25% = €125,000, but maybe there will be enough in the bank account to sort this by the time you hit 50, or you could wait until there is.

Then at 60 you can retire your newer pension plan and withdraw 25% of its value as a tax-free lump sum.

First €200,000 of all lump sums taken is tax-free. From €200,000 to €500,000 is taxed at 20%.

There's another method of calculating the lump sum, relating to your salary and service, which can sometimes work out better than 25% of the fund. You should ask your broker to calculate using both methods before you make your final decision.

Regards,

Liam
www.FergA.com
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Thanks Liam, sounds right.
 
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