AMRF (Approved Minimum Retirement Fund)

What is an AMRF?

Before an individual can take out an ARF (Approved Retirement Fund), up to €63,500 of their fund must be used to purchase an Approved Minimum Retirement Fund or AMRF. An individual AMRF holder can access up to 4% of the value of the assets each year as a once-off withdrawal. Any distribution taken form the AMRF can be used to reduce the minimum distribution amount from the ARF assets in that year.

In certain circumstances an individual can take out an ARF without having to also take out an AMRF. If the person has a guaranteed income of over €12,700 per annum including the state pension then an AMRF is not required.

What is the difference between an AMRF and an Annuity (income for life)?

You can draw regular income from an Annuity. With an AMRF you can only draw investment growth before age 75. Therefore the ability of an AMRF to provide a regular income in retirement can be severely restricted if investment returns prove to be poor. An AMRF may be unsuitable for an individual who may need to take a regular drawdown from the fund before age 75. This is the reason why many individuals take out an ARF with an AMRF so that they may use the ARF to draw down a regular income. An annuity is a fixed guaranteed regular income for life and this type of pension may suit certain individuals. If you die early an annuity does not make sense!

Therefore it is extremely important to seek "ADVICE" when considering retirement. Please do not hesitate to call our office on 01-4546730 or email us with your query. We will be able to help you make the correct INFORMED decision for your retirement.

Paul Ryan Pension & Financial Consultants Ltd. is regulated by the Central Bank of Ireland.

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