Three things, in order
If you read nothing else on this page, read this. Everything else is detail, and the detail is where the money is.
When can you actually retire?
People mix these up constantly, and the difference between them is where retirement plans fall down.
From 60, sometimes 50
Private pensions can normally be accessed from 60, and from 50 in some cases if you have genuinely left that employment.
Executive pensions and old schemes from previous jobs often have earlier access than people realise.
From 66, deferrable to 70
Not 67. Increases were proposed years ago and never happened.
Since 2024 you can also choose to put it off up to age 70 in return for a permanently higher weekly rate, around €363.90 at 70.
What are you actually aiming for?
There is no official target, and anyone who gives you one without asking about your life is guessing. But there are benchmarks worth knowing.
The lump sum, and how it is taxed
You can normally take 25% of your fund as cash. It is taxed in stages across your lifetime, not per pension, and these are lifetime limits covering every pension you hold.
Some occupational schemes calculate the lump sum on salary and service instead of a straight quarter, and occasionally that produces a better result. It is worth checking rather than assuming.
ARF or annuity
Once the lump sum is taken, the rest of the fund has to produce an income. There are two main routes and they suit different people.
An annuity
You hand the fund to an insurance company and they pay you a set income for life, however long you live. Certainty is the entire product.
The downsides: the money is generally gone, so there is usually nothing to pass on, and the rate is fixed at the moment you buy it.
An ARF
Your money stays invested and you draw from it as you need. Flexibility and control, and whatever is left can pass to your family.
The downsides: the value moves with markets, and the fund can run out if you draw too hard or get a bad run early. You must draw a minimum each year: 4% from 61, 5% from 71, and 6% where ARF assets are €2 million or more.
Six things to watch out for
Most of these cost money quietly rather than obviously, and all of them are avoidable with a couple of years of notice.
Two different starting points
The date is chosen for you in one case and by you in the other, and that changes almost everything about the planning.
If you are on PAYE
If you own the business
When to do what
The people who retire comfortably are almost always the people who started thinking about it early. It is much less about how much they had.
Three to five years out
Find every pension you have ever had and get a value for each. Request your PRSI statement. Work out roughly what you actually spend. This is also the point to look at how much investment risk you are carrying, because a bad run now is much harder to recover from than one at forty.
One year out
Model the options properly: lump sum size, ARF against annuity, the order of drawing things, and how the years before 66 are covered. Get it in writing and let it sit for a few weeks before deciding anything.
The weeks before
Paperwork, and only paperwork. If you are still making decisions at this stage, something has gone wrong further back.
Questions we get asked
Can I retire before 60?
Often yes. Many private pensions allow access from 60, and from 50 where you have genuinely left that employment. Executive pensions and preserved benefits in a former employer’s scheme frequently allow earlier access than people expect. Whether you should is a different question, because a fund that has to last from 55 has a lot more work to do.
How much do I need to retire?
Work out what you spend now, subtract what stops at retirement, then subtract the State Pension. What is left is what your fund has to produce. As a rough guide, every €20,000 of yearly income you want from your fund needs roughly €500,000 saved. That ratio is blunt, but it is the fastest way to see whether you are in the right region.
Do I have to take the full 25% lump sum?
No, and sometimes you should not. Every euro taken out is a euro no longer growing. If you have no immediate use for the cash and no tax reason to take it, leaving more invested may serve you better. It depends on what else you have and what you want the money to do.
What happens to my pension when I die?
It depends on the route you took. An ARF can generally pass to your spouse or civil partner, and on to children after that, with different tax treatment depending on their age and relationship. A standard annuity usually stops, unless you bought a version that continues paying a spouse. This is exactly why the decision should be made with your partner present.
I have pensions in three different jobs. What do I do?
Get a value and a full schedule of benefits for each one first, then look at whether consolidating helps. Sometimes it does, because it simplifies charges and drawing. Sometimes it definitely does not, because an older policy can carry guarantees or terms you would not get today. You cannot know which without looking at each one properly.
Start two or three years out, not in the last fortnight.
We will find every pension you hold, model the lump sum and the income, and show you the gap before the State Pension starts.
Book a first meetingRetiring in the next few years?
Start now rather than in the last fortnight. We will find every pension you hold, work out what the lump sum and the income look like, and show you the gap before the State Pension starts.
Pick a date and time that suits you.
No sales pitch, just a conversation about what you already have, what it is heading for and whether we can improve it. You will get a written summary either way.
