Just because you have retired doesn’t mean you have to give up control of your hard-earned pension fund. You may be able to keep investing your pension fund after you retire, which means your money is working hard, even after you have stopped.
Investing in Retirement
One of the best things about retirement is having choices. Like the choice offered by many pension plans to continue investing your pension fund the way you want, even after you retire. This is generally called the Approved Retirement Fund (ARF) option.
Approved Retirement Fund (ARF)
An ARF allows your retirement fund to remain invested. This gives you a lot of control over your fund.
You decide which funds you want to invest in and when you want to withdraw your money. And unlike annuities, you can leave what remains in your ARF to your family members when you die.
Before you can invest in an ARF you must have a guaranteed income payable at retirement for life of at least €12,700* a year.
If not, you must use the first €63,500* of your pension fund to buy either a guaranteed income for life (an annuity) or an Approved Minimum Retirement Fund (AMRF).
*as of May 2016
There is a minimum amount you must take out of your ARF each year and it depends on your age. For most people this is:
- 4% of the value of your fund if you are over 60.
- 5% of the value of your fund if you are over 70.
Other than that you can make withdrawals as often as you like. A word of caution, however. Between losses on investments and regular withdrawals, it is possible that your ARF could run out before you die.
Approved Minimum Retirement Fund (AMRF)
An AMRF is similar to an ARF. It is an investment fund that you own.
The main difference between the two is that you have limited access to your money from an AMRF until you reach 75. Once you are 75, your fund converts into an ARF and you can withdraw money whenever you like.
You will have to pay tax on any money you withdraw from your ARF or AMRF. That includes income tax, the Universal Social Charge (USC), Pay Related Social Insurance (PRSI) if you are under 66, and any other taxes that might be due.