Approved Retirement Fund (ARF)

An Approved Retirement Fund (ARF) is a flexible retirement savings option in Ireland, allowing individuals to preserve, manage and control thier retirement fund while drawing income from their pension funds after retirement.

Key Features

Eligibility: ARFs are available to individuals aged 60 or over.
Funding: Funds can be transferred from a Defined Contribution Pension Schemes, PRSA, or other retirement savings plans.
Income Flexibility: Retirees can withdraw funds as needed, either as lump sums or regular withdrawals, subject to income tax and USC on the amounts withdrawn.
Tax-Free Growth: Funds in an ARF grow tax-free.
Minimum Withdrawal: Individuals aged 61 or older must take a minimum income of 4% per annum from the fund. From 71 onwards the minimum income withdrawal amount is 5% per annum.
Investment Options: ARFs can be invested in various assets such as stocks, bonds, and property, depending on the provider and the individual's preferences.
Inheritance on death to Spouse or Child: In the event of your untimely death the fund is protected and can be transferred to your spouse as an ARF their own name or encashed in full - subject to income Tax & USC. If spouse is deceased then the fund is transfered to your estate and is subject to normal inheritance rules (CAT). This is unlike the annuity where on death your income dies with you (unless spouses provision made at outset).

An ARF provides a flexible, tax-efficient way to manage retirement savings, offering freedom in income withdrawals and allow for continued investment growth after retirement. It is a popular option for individuals seeking more control over their retirement funds rather than opting for a fixed-income annuity.