Options at Retirement
Once you reach retirement, your earned income is replaced by the income produced by your pension fund.
At this time you have a number of important decisions to make to ensure that your fund at retirement will provide you with a secure income for the rest of your life. You may be able to choose what to do with your retirement fund depending on your individual circumstances.
Two of the most important factors you should consider are the way in which you wish to use your pension fund to provide an income in retirement and whether you wish to pass the balance of your fund to your dependants after your death.
Most people will choose to take the very attractive tax-free lump sum option of up to €200,000 from their pension fund (subject to Revenue rules) and then use the balance to meet their financial needs in retirement through one of three further retirement options:
- Purchasing a Pension (also known as an Annuity),
- Investing in an Approved Retirement Fund (ARF) or,
- Taking a taxable lump sum,
- The retirement option that is right for you will depend on many factors, including:
- The size of your retirement fund;
- The level of income you and your spouse/civil partner/dependant will need during your retirement years;
- The amount of other assets – apart from your retirement fund – that you have to fall back on;
- Whether investment growth or security is more important to you during your retirement years;
- Whether you wish to pass your retirement fund on to your dependants; and
- Your current state of health. Speak to us in Hennelly Finance before you make any decision about the proceeds of your retirement fund. We can offer you a complete financial review, which will help you to choose the retirement options that best suit your needs.