Case Study 3
We don’t provide financial advice so this case study is a guide to help you decide which PRSA option suits you best. We hope you find it useful for your research.
I’m an Employee or Director in an Occupational Pension Scheme (including State Employees’ Superannuation Scheme)
If your employer provides you with a pension scheme, the benefits may not be enough to see you through your retirement, particularly if you aim to retire early, before your scheme’s normal retirement age.
So...making extra provision through a retirement savings plan, owned by you, could make good sense. This can be done by putting a PRSA in place on an Additional Voluntary Contribution basis. This is commonly known as a Standalone PRSA AVC and you get generous tax incentives from the State for doing so.
It’s like setting up a savings plan, with advantages:
- State assistance through tax relief, subject to certain limits, on your investment,
- no taxes being paid on the profits made by the investments,
- a tax-free lump sum when your plan matures, and
- you can use the balance to provide you with an income.
Contributions to this plan can be made by you on a monthly direct debit basis from your bank account or by making one-off cheque payments – whatever works for you. And, you’ll be entitled to Income Tax, PRSI and health levy reliefs on your contributions, subject to the normal revenue limits.