Personal Retirement Savings Account (PRSA)

At DW Financial we will help you select the most suitable Personal Retirement Savings Account (PRSA) 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:

• Portability – You can move your PRSA from one employment to another.
• Your employer can contribute to your PRSA.
• You can pay your PRSA by direct debit or it can be deducted from your salary.
• You decide how much you contribute towards your plan.
• The flexibility within the plan allows you to increase or decrease your contribution level as you see fit.
• You have the option to retire from age 60.
• You do not have to give up work to avail of your retirement options.

Is a PRSA for me?

PRSA’s are available to everyone whether you are an employee, self-employed or not in taxable employment. You do not have to have a taxable income to contribute to a PRSA. This gives people the flexibility to save for retirement even if they are not currently working.
There are two types of PRSA. A Standard PRSA and a Non-Standard PRSA. The difference between the two is shown below.

Standard PRSA

  1. There is a maximum level of charges that can be applied i.e. 5% of premiums paid and 1% per year of the PRSA fund value.
  2. The PRSA funds can only be invested in pooled funds where the assets are spread across a large number and type of investments to spread the risk.

Non-Standard PRSA

  1. There is no maximum level of charges that can be applied.
  2. There is a wider range of funds available to invest in under a Non-Standard PRSA.

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 lump sum (subject to a maximum of €200,000).
• Use the balance of your fund to: 

     A. Purchase an Annuity
     or
     B. Invest in an ARF (Approved Retirement Fund) / AMRF (Approved Minimum Retirement  
     Fund)

 • Take a taxable lump sum

Note:
An Annuity is an income that is guaranteed for your life.
An ARF/AMRF is an investment that allows you to continue to invest in the markets and take a flexible income from the fund.

DW Financial will help you in every aspect of planning for your retirement. When considering your options, we look at everything from how much to contribute, what provider to use and which fund to select. We endeavour to help you make the best possible decision to plan for your retirement.

Pension Contributions:

When saving for retirement, Revenue have determined how much you can contribute towards your retirement to avail of tax relief. Below is a chart to show how much you can contribute towards your retirement.

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

 

*The above are percentages of your net relevant earnings. Your net relevant earnings are subject to a maximum of €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 effect:

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

However, if you pay the higher rate of tax, which is currently 40%, it has the following effect:

Gross Contribution €200 per month
Tax Relief @ 40% €80 per month
Net Cost of Contribution €120 per month

Note: The above information is correct as at June 2020.

Warning: Past performance is not a reliable guide to future performance.Warning: Benefits may be affected by changes in currency exchange rates.

Warning: The value of your investment may go down as well as up.

Warning: If you invest in these products you may lose some or all of the money you invest.