What Are The Practical Decisions & Steps I Need To Take When Accessing My Private Pension?
If you are Self Employed, a Company Director or a member of an Employer’s Pension Scheme, it can feel like a very long journey from the time you first started paying into your Pension until the time you finally get to withdraw money from it. You also had to put up with stock market volatility along the way which makes your pension rise and fall rapidly, sometimes without any warning.
The good news is that finally you might be at an age when you are considering accessing your pension and getting money out, not putting money in.
You now have a lot of decisions to make and steps to take, unfortunately without the necessary knowledge to make informed choices.
We have been helping & guiding our clients through this process for many years, and there are several important practical decisions we would like to share with you:
Step 1 – Can I Access My Private Pension Now? – just because you want to access your pension, doesn’t mean you can. Most pensions can be accessed from age 60 at the earliest, but some pensions (Personal Retirement Bonds and Pensions from previous employment) can be accessed from age 50. Once you figure out what type of pension you have, you can see what your options are.
Step 2 – Getting the most out as a tax-free lump sum – the starting point with any pension is making sure you get the biggest possible tax-free lump sum from the pension. This is typically calculated based on your years-service with an employer & your salary, or a simple 25% of the value of the pension fund. It’s important to look at both calculations to see what the tax free lump sums options might give you.
Step 3 – What do I do with the balance – Approved Retirement Fund (ARF) or Annuity ?- after getting your tax free lump sum you will have to choose between an Annuity or an ARF with the balance of your pension fund. This might be the first time you hear terms such as these and there are big differences between these options with implications for future income, income tax, investment growth & risk, and inheritance options for your family.
Step 4 – Dealing with your Pension Provider – if your pension is with one of the main providers such as Irish Life, Zurich, Aviva, New Ireland, Friends First, Standard Life etc, or one of the main banks, then it can be hard if not impossible to get financial advice from them, especially at the moment. This is even before you receive paperwork from them, which can be hard to understand and confusing to complete correctly.
If you are considering your options, then we are here to help. We have been advising clients all over Ireland for many years now making sure they make the right decisions when it comes to withdrawing money from their pensions.
Once you know the decisions that need to be made and get sound financial advice with somebody who knows the system, then Accessing your Pension can be far more straightforward than you think. We will prepare all the forms and paperwork for you, deal with your pension provider on your behalf, and of course keep you updated along the way.
Thank you for reading and take care.
Michael Coburn and Jim Doyle
Serving the South East, Midlands, East Coast & Dublin
Phone Joanne on 01 5260770 or 053 9110380
COMPLIANCE & FINANCIAL MANAGER
Michael has been providing tax, investment and lifetime financial planning advice to clients since 2005. He has an in-depth understanding of Business Owners and their requirements, which allows him to guide his clients through the complex world of long-term financial planning.