Voluntary Contribution Cost Q

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Edge70

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Looking at a scenario where I may retire early in January'27, I would have 1,795 insurable weeks, so short 285. I will have 1 months pay in 2027 (i.e. Jan'27), only income after that will be AFR drawdown, would my Voluntary contribution cost be 6.6% x Jan'27 Salary? Then for subsequent years is it a flat €500 or the same 6.6% of Jan'27 salary until I hit 2,080 weeks etc

I could just sign on for Jobseeker credits, but I wouldn't be actively seeking employment, which is one of the conditions
 
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as far as I know, in the year that you retire you can make voluntary contributions for the portion of the year you have no paid PRSI contributions, so ignoring the job seekers credit, it is probably something like 11/12 of €500 that you would pay for the residual tax credits for the year,

you can only but full years after that, so you most likely will have to buy 6 years - circ 312 contributions to get you over 2080, so if you get the 9 mts credit and the 1 month paid work, then your contributions would be something like 40 for 2027, so you would be short 245, so 5 years paid contributions would be sufficient to get you over 2800, but if you are just short say 2070 or something then you should work out whether the difference in pension per week is worth paying an additional €500 to buy a full year,
 
LDFerguson said:
If you mean you'll have income from an ARF, then as long as it's over €5,000 per year it generates Class S PRSI deductions which count towards the Contributory OAP.
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So there is no requirement to make any Voluntary PRSI contrubution as insurable weeks will continue to mount under Class S? Yes ARF will generate in excess of €5k p.a.
 
Edge70 said:
So there is no requirement to make any Voluntary PRSI contrubution as insurable weeks will continue to mount under Class S? Yes ARF will generate in excess of €5k p.a.
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You will gain 52 class S from your ARF each year.
You should claim pay related Jobseekers benefit when you cease employment. This will gain you 39 Reckonable Jobseekers credits.

Read this thread for more information.

Key Post - PRSI and planning retirement

This Key Post is in the form of a FAQ where I don't know many of the answers. I will update the post as I get answers. 1. PRSI payable on reaching state pension age Answer: 0 (Class M) 1a. Does this relate to the start of the tax year in which you become 66? Or to after your birthday? Answer...
www.askaboutmoney.com
 
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cloughy said:
it is probably something like 11/12 of €500 that you would pay for the residual tax credits for the year,
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The OP's question has already been answered but just in case anyone is reading this...this is not how it actually works. In the year I ceased insurable employment it was in March and when I made that clear to the DSP I was awarded something like 42 V1 credits for that year but I still had to pay the €500. I believe €500 is a hard minimum payment, even if you are only getting a single V1 contribution (which wouldn't be advisable of course).
 
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