How much can I withdraw from my ARF, and how is it taxed?
An ARF is the term for ‘Approved Retirement Fund’. You will normally withdraw a lump sum of 25% from your pension, and the remaining 75% can then be used to set up an ARF.
- How Much Can You Withdraw From an ARF?
You have full flexibility — you can withdraw as much or as little as you want, including the entire fund at once. There is no upper limit on withdrawals.
However, once you are age 60 or over for a full tax year, Revenue requires a minimum annual withdrawal :
| AGE | MINIMUM ANNUAL WITHDRAWAL |
| 60-69 | 4% of ARF value |
| 70+ | 5% of ARF value |
| If total ARF + vested PRSA > €2M | 6% of ARF value |
- How ARF Withdrawals Are Taxed
Every euro you take from your ARF is treated as income. That means:
- Income Tax at your marginal rate (20% or 40%)
- Universal Social Charge (USC) applies to the withdrawal
- PRSI may apply depending on your age and circumstances
This is equivalent to receiving a salary.
Key points:
- The growth inside the ARF is tax‑free — tax only applies when you withdraw money.
- Withdrawals are added to your total annual income, which determines your tax band.
Example
If you withdraw €30,000 from your ARF and your other income already puts you in the higher tax band:
- Income Tax: 40%
- USC: based on USC bands
- PRSI: if applicable
Your ARF provider deducts these taxes at source before paying you.
Want to minimise your tax cost?
There are smart ways to manage ARF withdrawals, so you don’t pay more tax than necessary — for example, coordinating with your State Pension, timing withdrawals, or splitting income with a spouse.
We are always happy to discuss with you the most tax-efficient ways to withdraw income from an ARF, based on your circumstances. Just reach out, and we can set up a call.
Jim Doyle
Owner & Director
ACMA, QFA, CGMA
Jim Doyle brings over 30 years of experience in financial and client advisory services. A qualified Accountant and Financial & Investment Advisor, Jim has built a career grounded in trust, expertise, and a deep commitment to client success.
