All income figures quoted in the calculator are assumed to be gross (i.e. before the deduction of Tax). The assumed inflation rate for present day values and values at retirement is 2.5% p.a.
Salary and regular contributions are assumed to increase by 2.5% p.a. over the projection period. Regular contributions are paid in advance (i.e. at the start of each month).
Contributions and any existing pension funds are assumed to be invested in a fund from which a total fund charge of 1% p.a. is deducted on a monthly basis. In practice, charges will vary depending on the chosen product and fund(s). No allowance has been made for any potential intermediary commission or other product charges which may be payable in practice.
The projected values assume the following growth rates, based on Society of Actuaries Guidance for the assumed asset mix, corresponding to the chosen risk profile;
If you are 5 years or more from retirement:
- Very Low Risk Investor 1% per annum.
- Low Risk Investor 1.7% per annum.
- Low to Medium Risk Investor 2.4% per annum.
- Medium Risk Investor 3.05% per annum.
- Medium to High Risk Investor 4.25% per annum.
- High Risk investor 4.625% per annum.
- Very High Risk Investor 5% per annum.
If you are less than 5 years from retirement:
- Very Low Risk Investor 0% per annum.
- Low Risk Investor 0.7% per annum.
- Low to Medium Risk Investor 1.4% per annum.
- Medium Risk Investor 2.05% per annum.
- Medium to High Risk Investor 3.25% per annum.
- High Risk investor 3.63% per annum.
- Very High Risk Investor 4% per annum.
Where your investment is said to have performed ‘at a lower growth rate’, a growth rate of 0.5% p.a. has been used.
When calculating the total regular premium required to close your Pensions Savings Gap or fund your stated retirement income goal it is assumed that existing funds, single premiums, retirement age and risk profile chosen remain the same.
Warning: These figures are estimates only. They are not a reliable guide to the future performance of your investment. The value of your investment may go down as well as up and you may get back less than you invest.
Annuity payments increase by 1.5% per annum. The estimated annuities quoted are payable monthly in advance and guaranteed for 5 years and life thereafter.
For married lives, the annuity rate used assumes an attached spouse’s annuity of 50% of the main life annuity. In the event of death of the main life, the spouse’s annuity becomes payable once the guaranteed period has elapsed.
The actual annuity rate at retirement is likely to differ from the annuity rate used in the illustration. Different annuity options can be chosen at retirement.
Approved Retirement Fund assumptions
The income selected to be withdrawn from the Approved Retirement Fund (ARF) is payable monthly in advance and the figure shown is a 10 year average. If you make regular withdrawals from your ARF and you withdraw more income than your fund value grows by each year, the fund value of your ARF could run out before you die. Higher percentiles of income withdrawn from an ARF fund will result in the fund depleting faster.
A maximum of 4% of the value of the Approved Minimum Retirement Fund may be withdrawn each year. The projection assumes any AMRF automatically becomes an ARF when the policyholder reaches age 75. The risk profile chosen by you (and the corresponding assumed growth rate used) applies to any ARF/AMRF projection. The value of your investment may go down as well as up.
Warning: The income you get from this investment may go down as well as up.
Maximum tax-free cash lump sum
Where a Tax-Free lump sum is shown, the projections assume that the maximum proportion of the fund (as is currently allowed by tax law) is taken as a Tax-Free Lump Sum.
Depending on employment status, the maximum tax-free cash lump sum that can be withdrawn at retirement is either 25% of the accumulated fund or, a Revenue specified factor based on your final salary at retirement and service up to retirement, subject to a lifetime limit of €200,000.
Should you withdraw a lump sum which exceeds this maximum, the excess will be subject to a once-off deduction of income tax (currently 20% on a lump sum in excess of €200,000 but less than €500,000) and 40% on a lump sum in excess of €500,000 plus the Universal Social Charge (USC) of up to 8% (depending on your income and age) and 4% PRSI (if applicable). Note that all tax free lump sums taken from pension arrangements since 7 December 2005 count towards the €200,000 and €500,000 limits. In the event of death, the proceeds of the pension fund may be liable to tax.
Under the new National Pensions Framework, the age at which people qualify for the State pension will increase over time – to 66 years of age from 2014, 67 in 2021 and 68 in 2028. The amount payable may vary depending on certain criteria being met. The State Pension (Contributory) is €12,912 p.a. in today’s terms.
This calculator is based on Aviva’s understanding of current law, tax and Revenue practice. Changes in the legislation governing pensions, funds and taxation may be made by the Government at any time.
Aviva Life & Pensions Ireland DAC accepts no responsibility for any action taken as a result of using this calculator.