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Personal Retirement Savings Account (PRSA)

A Personal Retirement Savings Account (PRSA) is a personally owned pension that lets you save for retirement on your own terms. PRSAs are flexible; you can increase, decrease or stop your contributions at any time without any charge or penalty.

PRSAs are portable; you can take it with you when changing jobs or transfer it to another PRSA provider.

It is an investment account that allows you to invest your savings in various investment funds through your account. You can make regular payments or lump sum payments, and these are usually tax deductible. You don’t pay tax on any investment gains but you might end up paying a relatively low level of tax on the retirement benefits you get from your PRSA. 

Who is this product for?

A PRSA is for everyone, regardless of employment status. You can take it out if you are a part-time or casual employee, a highly paid professional, self-employed, a contractor, an employer, an employee or a partner in a partnership.

If your employer does not provide you with access to an occupational pension scheme or if certain restrictions apply to their scheme, then you must be provided with access to a Standard PRSA.

Product features

  • Tax relief – Get tax relief on your PRSA contributions; plus any investment growth of your PRSA is tax-free.
  • Flexible – You are in control: you decide how often and how much you want to contribute to your PRSA.
  • Portable – If you move jobs, or even take a career break, you can take your PRSA with you.

 

Tax relief

You can claim income tax relief on contributions to a A PRSA, up to certain limits. And if your retirement fund grows, the growth is also tax-free. When you retire you can – subject to certain limits – take a lump sum, some of which may be tax-free.

PRSA UPDATE FOR EMPLOYERS | As at January 2023

Employers will now be able to pay unlimited BIK free contributions to a PRSA for an Employee or Company Director. The contributions will not be limited to salary and service, existing scheme funding or retained benefits.

As a Company Director or small employer, if you are on a higher salary, you now have the option to extract a larger amount of profits in which all contributions paid will receive immediate tax relief in the year that it is paid.

This means PRSA’s may now offer you a more flexible and suitable means to retirement saving and planning according to your particular financial needs.

Find out more

 

 

Personal Retirement Savings Account (PRSA).

Benefits at Retirement

On retirement, you can take a tax-free lump sum of 25% of your fund, up to a maximum of €200,000. The remainder of your fund can then be invested in an Annuity or Approved (Minimum) Retirement Fund A(M)RF/ Approved Retirement Fund.

If you have taken out a PRSA to make Additional Voluntary Contributions, you must take your benefits from your PRSA in the same way as you take the benefits from the main scheme.

 

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