PRSA Pension

Published February 5, 2026
PRSA Pension
I am 60 years of age and have a PRSA pension worth €250,000.
The Question

I am 60 years of age and have a PRSA pension worth €250,000.

Accessing your €250,000 PRSA at age 60 in Ireland is a significant financial step with specific rules and options to consider. Here’s a breakdown of how you can access your PRSA.

The Steps

Accessing a €250,000 PRSA pension.

1. The Tax-Free Lump
Sum

You are entitled to a tax-free lump sum of up to 25% of your total pension fund. Calculation: 25% of €250,000 = €62,500 Tax: This portion is completely tax-free up to a lifetime limit of €200,000. You would be well within this limit, so the full €62,500 would be paid to you without any tax deductions.

2. What to Do with the Remaining €187,500

After taking your tax-free lump sum, the remaining €187,500 must be used to provide a retirement income. You have two main choices:


Option 1

Approved Retirement Fund (ARF)

An ARF is a personal investment fund where you can keep your pension pot invested. This is a popular choice for those who want to continue to manage their money and have the potential for it to grow.

How it works

Your €187,500 is transferred into an ARF, which is a professionally managed investment pension account. The funds remain invested, and any growth is tax-free.

Accessing your money

You can take a regular income or make withdrawals as needed. However, withdrawals are subject to income tax, Universal Social Charge (USC), and PRSI (until you turn 66).

Mandatory Withdrawals

Once you turn 61, you are required to take a minimum withdrawal from your ARF each year. This is known as an “imputed distribution” and is currently 4% of the fund’s value (this rises to 5% at age 71).

Inheritance

A key advantage of an ARF is that any remaining funds can be passed on to your beneficiaries after your death.

Option 2

Annuity

An annuity is an insurance product that provides a guaranteed, regular income for the rest of your life in exchange for a lump sum from your pension fund.

How it works

You use the €187,500 to purchase an annuity from a life insurance company.

Income

The company will calculate a guaranteed income based on several factors, including your age, your health, and the prevailing annuity rates at the time.

Pros & Cons

The main advantage is security—you have a predictable income for life. The main disadvantage is a lack of flexibility; you cannot change your income, and the fund is not inheritable. The income from an annuity is subject to income tax and USC.

What to do now
  1. Contact your Pension Provider: Your first step is to contact the company or institution that holds your pension. They will confirm the exact type of pension you have and provide you with a retirement options pack.
  2. Seek Professional Financial Advice: Given the value of your pension and the long-term nature of these decisions, it is highly recommended that you consult a Qualified Financial Pension Adviser.