What are my Zen retirement options?

With a Zen Pensions Personal Retirement Savings Account (PRSA), you have several flexible options at retirement, all designed with your future in mind. Here's what you need to know...

Your Zen Pensions PRSA: What Happens at Retirement?

Reaching retirement is a huge milestone. When you get there, your Zen Pensions PRSA offers a range of choices, so you can shape your next chapter, your way.

First: Take a Tax-Free Lump Sum

Most people start by taking up to 25% of their retirement savings as a tax-free lump sum. There is a cap, as you can only take up to €200,000 tax-free over your lifetime, with anything above that taxed at 20% (up to €500,000), and then 40% if you go even higher. This lump sum can help with big life expenses, travel dreams or just a financial cushion. It's your call.

Next: Turn Your Savings into Income

With the rest of your retirement savings, you have four options:

1. Buy an Income for Life (called an ‘Annuity’): This gives you a predictable income for the rest of your life. No surprises here - it’s simple, secure, and can make budgeting in retirement easier. Your payout depends on the market rates the day you purchase and factors like your health and age.
2. Invest in an Approved Retirement Fund (ARF): Want more flexibility? With an ARF, your savings stay invested while you draw down what you need, when you need it. There's more risk (and potential reward), so it's ideal if you like to stay in control. The ARF holder must, in effect, take a minimum taxable withdrawal of at least 4% each year of the value of the ARF, from age 61 up to age 70. Thereafter, this increases to at least 5% each year or 6% if the ARF exceeds €2m at any age from 61 onwards.
3. Keep your savings invested as a Vested PRSA. Once you take your retirement lump sum, the remainder of your funds can stay invested allowing you to draw a flexible income on your terms – when you want and how much you want.
4. Take a Taxable Lump Sum: Prefer cash? You can take the rest as a lump sum, but remember - it’s taxable at your marginal rate.

Flexible Access: When and How You Want

You can start accessing your Zen Pensions PRSA from age 60, or from age 50 if you are retiring from your job early. If you don’t want to withdraw your retirement savings straight away after taking your tax-free lump sum, you can leave them invested in your PRSA until you reach age 75 when your account “vests” automatically. From age 75, Revenue assumes withdrawals for tax purposes even if none are made, so planning is important. The same minimum withdrawals noted for ARFs above also apply to a Vested PRSA.

Planning for Your Future, the Zen Way

At Zen Pensions, you’re in control. Our digital pension makes checking your options, adjusting your investment, or getting help as easy as sending an in-app message. No confusing paperwork. No jargon. Just pension freedom, sorted.