Personal Retirement Savings Account (PRSA)

At DW Financial we will help you select the most suitable Personal Retirement Savings Account for you.  A PRSA is a retirement savings plan that was introduced in 2002. It was designed with long term savings in mind. Like a Personal Pension Plan it is owned by you and taken out in your name. 

A PRSA has many benefits such as;

• The flexibility within the plan allows you to increase or decrease your contribution level as you see fit.
• If you change employment you don’t have to move the plan.
• You decide how much you contribute towards your plan.
• You have the option to retire from 60.
• You do not have to give up work to encash your fund.

However, unlike a personal pension plan the range of funds available to help you save towards retirement is limited. As part of your complementary review we will explore this and see which type of pension plan meets your needs best. 

With a PRSA there are two types, a Standard PRSA and a Non Standard PRSA, the difference between the two are the fees and charges.

Is a PRSA for me?

A PRSA is suitable for you if;
PRSA’s are available to everyone whether an employee or self employed.

At Retirement: 

If you have contributed towards an AVC the benefits must be taken in the same way as the benefits of your existing occupational scheme. 

At Retirement

When saving for retirement it is important to know how you can access your PRSA at your chosen retirement age. With a PRSA you can do the following;

• Take 25% of your fund as a tax free lumpsum (subject to a maximum of €200,000

• Invest the balance of your fund in either –

C. An Annuity
D. An ARF (Approved Retirement Fund) / AMRF (Approved Minimum Retirement Fund)

 • Take a taxable lump sum

At DW Financial we will help you in every aspect of planning for your retirement, when considering your options such as how much to contribute, what provider to use and which fund to select we find that examples can help you in your decision.

AVC (Additional Voluntary Contributions)

An AVC is an additional contribution you can make towards retirement on top of any contributions you are currently making via your occupational or staff pension.

This type of contribution is suitable for anyone who is already in a pension scheme through their employer but would like to contribute more towards their retirement.

For example, if a 40-year-old is in an occupational pension where their employer pays 5% and they pay 5% towards retirement, the employee under revenue rules can contribute up to an additional 15% in to an AVC.

Pension Contributions:

When saving for retirement there is a very defined was of seeing how much revenue say you can contribute towards your retirement in order to avail of tax relief. Below is a chart to show how much you can contribute towards your retirement.

AGE Maximum Contribution
29 or under 15%*
30-39 20%*
40-49 25%*
50-54 30%*
55-59 35%*
60+ 40%*

* These are percentages of your net relevant earnings up to €115,000

Tax Relief:

As with all pension contributions you can avail of tax relief on your contributions based on the level of tax you currently pay.
I.E. if you contribute €200 per month towards your retirement and pay the lower rate of tax which is currently 20% it has the following affect

Gross Contribution €200 per month
Tax Relief @ 20% €40  per month
Net Cost of Contribution €160 per month

If, however you pay the higher rate of tax, which is currently 40%

Gross Contribution €200 per month
Tax Relief @ 20% €80  per month
Net Cost of Contribution €120 per month