Can I Take A Lump Sum From My Pension Tax Free?
Can I Take A Lump Sum From My Pension Tax Free? You can usually take up to 25% of your pension fund as a lump sum, of which the first €200,000 is tax free. For example, if you had a pension fund valued at €500,000 then your lump sum would be 25% of €500,000 = €125,000. As the €125,000 lump sum is under the €200,00 limit this means the full €125,000 lump sum is paid tax free. If your lump sum however was over €200,000 then any amount over €200,000 is taxed at 20%. This is a total lifetime limit even if lump sums are taken at different times and from different pension arrangements. The timing of when you can do this is directly related to the type of pension you have and your age. In most cases the lump sum cannot be accessed until age 60 but there are some limited circumstances when you can access your pension lump sum from age 50. For example, if your pension relates to a period of previous employment, and you are no longer employed by that company, then you may be able to access your pension lump sum at age 50. If you have questions, please feel free to contact me using the contact details listed below. Michael Coburn BBS, QFA, FLIA, LCOI, RPA, SIA Dublin: 01 5267770 Wexford: 053 9110380 email@example.com Facebook: www.facebook.com/guardianwealthireland