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Will the money last?

The question every single person asks at retirement. This gives you a straight answer for your fund and your spending.

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4% minimum drawdown from the year you turn 61

5% from the year you turn 71

6% where ARF assets are €2m or more

The basics

What an ARF actually is

When you retire, after taking your lump sum, you generally choose between two things. Neither is right or wrong: an annuity buys certainty, an ARF keeps control.

Certainty

An annuity

You hand the fund to an insurance company and they pay you a guaranteed income for life. Certainty, but the money is gone and usually does not pass on.

Control

An ARF

An Approved Retirement Fund. Your money stays invested and you draw from it as you need. Flexibility, and it can pass to your family, but the fund can run out and the value moves with markets.

The rule that catches people out

You must draw a minimum amount from an ARF each year whether you need it or not.

It is called the imputed distribution, and it is taxed as income.

From the year you turn 614%

From the year you turn 715%

ARF assets of €2m or more6%

Before you commit

What to watch out for

Four things that decide whether the fund lasts as long as you do.

01 Drawing more than about 4% a year usually shortens the fund’s life sharply. Move the slider and watch.

02 A bad run early is far worse than a bad run later. Taking income out while markets are down does lasting damage, which is why the first few years matter most.

03 The State Pension is on top. Do not forget it when working out what you actually need from the fund.

04 You can mix. Some people buy a small annuity to cover the essentials and keep the rest in an ARF for everything else. It is often the sensible middle.

Finnegan Maguire Financial Advisors

Planning the last stretch?

We model it properly, including the lump sum, the tax, and what a small annuity alongside an ARF would do for you.

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4% Minimum drawdown from the year you turn 61.

From 71 5%

€2m or more 6%

Taxed As income

Try it

How long your fund lasts

Put in your fund, what you want to draw, and what you expect it to grow by.

Fund going into the ARF {{ fundLabel }}

Your age at retirement {{ ageLabel }}

Drawing each yearAs a share of the fund {{ drawLabel }}

GrowthPer year, after charges {{ growLabel }}

Thanks. We will send that over shortly, and one of our advisers will follow up if you would like.

Illustrative only and not personal advice. Figures are checked against Revenue, the Department of Social Protection and the Pensions Authority, and revised after each Budget. A simplified projection using steady growth, which real markets do not provide. Minimum drawdown of 4% applies from the year you turn 61 and 5% from 71, and 6% where ARF assets are €2 million or more. Withdrawals are taxed as income.

Where this sits

This calculator is one part of our pensions advice. The main pensions page explains the types, the relief, and how to tell whether the pension you have is any good.

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What the answer means

A stress test, not a forecast

The age at the top is roughly when the fund runs dry at that rate of drawing. If it is lower than you would like, three things change it: draw less, work a bit longer, or take less risk with the sequence of returns early on.

Do not panic if the number looks short. This assumes you never adjust, and in reality people spend more in their sixties and considerably less in their eighties. It is a stress test, not a forecast.

Half an hour, no charge and nothing to sign. We will run this on your real figures and tell you plainly what we would do in your position.

Book a call ↓ Call 0818 44 55 66

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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.

Cian O’Sullivan Director and Financial Adviser, Finnegan Maguire

30 minutes Phone or video call, no charge

Rather just ring? Call 0818 44 55 66 or email go@splash.ie

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