A personal Pension is available to the self-employed and those in non-Pensionable employment. They are designed to accumulate a fund to be used to provide an income at retirement. Tax relief is given by the revenue for contributions paid and the fund grows tax-free.
• Tax will be payable when an income is drawn at retirement. • You can retire from a personal pension at any time between 60 and 75. • At retirement one can take a tax free lump sum of up to 25% of the fund and the balance is used to buy an annuity (pension) that would be payable for the rest of your life or to invest in an ARF (Approved Retirement Fund). • There are many different fund choices available and the right fund choices are very important as the markets can offer significant differences in returns.
Tax Relief
Below is some information about how your PRSA is treated for tax purposes. You should remember that this information is based on current tax law, and cannot be guaranteed throughout your policy. Under current tax law, your PRSA contributions qualify for tax relief. You can contribute as much as you choose, but you can only claim tax relief within Revenue limits. The maximum contributions allowed for tax relief are as follows:
Age during tax year Tax relief limit
Under 30 15% of Net Relevant Earnings 30- 39 20% of Net Relevant Earnings 40- 49 25% of Net Relevant Earnings 50- 54 30% of Net Relevant Earnings 55- 59 35% of Net Relevant Earnings 60+ 40% of Net Relevant Earnings
