Approved Retirement Funds

An Approved Retirement Fund (ARF) is a personal retirement fund where you can keep your money invested after retirement, as a lump sum. You can withdraw from it regularly to give yourself an income, on which you pay income tax and other government levies. Any money left in the fund after your death can be left to your next of kin.

Investing in an ARF may be an option if you are self-employed, a proprietary director, or if you have a PRSA. If you are a member of an employer pension plan, you may also have this option, depending on the rules of your own pension plan.

If you do not withdraw any money from your fund, Revenue will assume that you have withdrawn 5% each year and income tax and income levy will be taken from your fund each February. So you will be charged tax whether you have taken an income or not.

An ARF invests in various assets such as shares, property, bonds and cash. Therefore the growth of your ARF fund depends on the performance of the assets it is invested in. ARFs are designed to grow in value but your original investment is not guaranteed. An ARF can run out during your lifetime if:

1. You make large, regular withdrawals from it.
2. Investment returns are less than expected.
3. You live longer than expected.

ARFs are subject to yearly management charges, these are taken from the fund and reduce the value of any growth in the fund.