So why target €2,000,000 as your final pension fund amount,
€2,000,000 is a suitable target for you in order to get the maximum allowable pension fund in retirement.
Let me explain how this works:
If both of you as a couple are entitled to the Contributory State Pension of €12,911 each at your state pension age, this will give you a combined income of €25,822 per annum in retirement (€12,911 x 2)
When you retire you will access your €2,000,000 Pension funds as follows:
- You will take €500,000 from your €2,000,000 fund as a Tax Free lump sum. The First €200,000 is tax free. The remaining €300,000 is taxed at 20%. You end up with €440,000.
- You must take 4% per annum form the balance of your pension of €1,500,000
- 4% of €1,500,000 gives you an income of c.€60,000 per annum.
As a couple when you combine your income from you State Pensions of €25,822 with your annual 4 % distribution from your pension fund of €60,000 you get a combined income of €85,822 per annum in retirement
So based on the above case you have income of €85,822 per annum and €440,000 as a tax free lump sum to spend in your retirement.
Does this sound like the retirement you want to achieve?
If you want to prepare your own personal plan please use our complementary pension report on the following site www.epen.ie
Employee Pension Advisors, Employee Pension Education and Premier Financial are registered trade names of PCS Financial Services (Kerry) Ltd. © 2019 – PCS Financial Services ( Kerry ) Ltd. t/a Employee Pension Advisors, Employee Pension Education and Premier Financial is regulated by the Central Bank of Ireland.