How do I access my pension, now that I’m retiring?
When you retire in Ireland, one of the most important decisions you’ll face is how to access your pension—starting with the tax-free lump sum, followed by your choice of an approved retirement fund (ARF) or Annuity.
What happens to the rest of my Pension?
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Upon retirement, you can typically withdraw up to 25% of your pension fund as a tax-free lump sum, with some limits to keep in mind:
Up to €200,000 is completely tax-free (lifetime limit)
The next €300,000 is taxed at 20%
Anything above €500,000 is taxed at your marginal rate (up to 40% + USC/PRSI)
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An ARF allows your remaining pension funds to stay invested, giving your money the chance to grow while providing flexible access.
Key Features:
Flexible withdrawals as needed
Growth potential through ongoing investment
Estate planning: Remaining balance passes to your family
Mandatory annual withdrawals:
4% from age 61
5% from age 71
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An annuity uses your pension balance to buy a guaranteed income for life, regardless of how long you live.
Key Features:
No investment risk — fixed income regardless of markets
Peace of mind for budgeting
Optional benefits:
Spouse’s pension (reversionary annuity)
Guaranteed payment period (e.g. 10 years)
Index-linking to keep up with inflation
FAQs
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No. You can take up to 25% of your pension as a tax-free lump sum.
You may be able to access the balance, but it will be subject to tax at your marginal rate.
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You can receive up to €200,000 in tax free lump sums within your lifetime from all of your pension.
Anything over this will be subject to tax.
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An ARF is passed to your next of kin. Depending on who receives the ARF there can be tax considerations.
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An Annuity can be passed to your partner under certain circumstances.
An Annuity cannot usually be received by your wider estate.