Approved Retirement Fund (ARF) | AMRF's
We have experience helping our clients invest their ARFs in a wide range of funds. We will ensure any decision you take is with long-term planning front of mind.
Introduction
Choosing the right options for your retirement is a big decision and it is important to get professional financial advice.
The good news is that you are able to take a cash lump sum when you retire. With the balance of your pension fund you will have several options:
- Purchase an Approved Retirement Fund (ARF) /AMRF
- Purchase an annuity
What is an Approved Retirement Fund (ARF) ?
An Approved Retirement Fund (ARF) gives you more control over how your retirement fund is managed. An ARF allows you to remain invested in the market with the ability to control your investment and take a flexible income in retirement.
An Approved Retirement Fund (ARF) works by allowing you to invest all or part of your pension fund after you retire. You can decide on the type of fund you would like to invest in, and the amount of risk you are comfortable with. With an ARF you can still withdraw from your fund on a regular or ad hoc basis (subject to income tax and USC. PRSI may also apply).
Giving you flexibility in retirement
“We always try to ensure our clients are aware of all potential options. Having an ARF allows flexibility and gives the client the control over their investment.”
Eoin Cullen BBS Msc QFA Grad. Dip CFP ®
Financial Planning Director
Features of an ARF
An Approved Retirement Fund (ARF) gives you more control over how your retirement fund is managed.
Flexibility
An ARF allows you the flexibility to withdraw as much as you wish annually subject to certain minimums.
Estate planning
Any funds in your ARF can be passed to your dependants.
Future annuity purchase
You have the opportunity to purchase annuity at a later stage.
Tax-Free Growth
Tax is only paid on withdrawals. Withdrawals are subject to income tax, USC and PRSI at your own marginal rate of tax.
Flexibility
An ARF allows you flexibility to withdraw as much as you wish annually subject to certain minimums
Estate planning
Any funds in your ARF can be passed to your dependence.
Future annuity purchase
You have the opportunity to purchase annuity at a later stage.
Tax-Free Growth
Tax is only paid on withdrawals. Withdrawals are subject to income tax, USC and PRSI at your own marginal rate of tax.
ARF Eligibility
You can invest in an Approved Retirement Fund (ARF) if you have:
Those who hold a Personal Pension Plan and have satisfied pension legislation may transfer to an ARF.
Those with a Personal Retirement Savings Account may be eligible to invest in an ARF.
Executive Plans & company defined contribution pension plan including Additional Voluntary Contributions (AVCs) may be eligible for investment in an ARF.
PRBs may be eligible from a defined contribution plan where permitted under the scheme rules of the original scheme
However, it is always worth consulting an expert in this area before making any decisions.
What happens to my Approved Retirement Fund (ARF) on death?
On your death, your ARF can be transferred to your spouse / civil partner tax-free who can continue to manage the ARF investments and take withdrawals. Alternatively, your ARF can be left to your children or other persons subject to income and/or inheritance tax which are summarised below.
Please note that this is a complex area, get in touch for more information on your own situation.
Withdrawals and tax
Pension legislation states you must withdraw a certain percentage from your ARF each year. The amount payable is calculated using the value of your ARF on 30th of November each year.
The percentage breakdown is:
– 4%, per annum in the year you turn 61 years of age
– 5%, per annum in the year you turn 71 years of age
– 6% if you have a combined ARF and Vested PRSA assets of €2 million or more in the year you turn 61.
Any withdrawals from your ARF are treated as income and tax under the PAYE system. This means your payment is liable to income tax, PRSI & Universal Social Charge (USC). The tax will be deducted at the source by your ARF provider.
Retirement Planning Experts
To enquire how our team can help you, please fill out the form to arrange a call.
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Main Street,
Clonee,
Co. Meath
