You need your own pension because the State pension isn't that generous. The full personal State Pension (Contributory) is just over €15,000 a year. Compare this to your salary now and the income you hope to live on when you retire. This is why you need your own pension.

A personal pension policy is a Revenue approved contract set up with a life assurance company by a self-employed person to save for retirement. It can also be set up by an employee who does not have access to a pension scheme organised by their employer. Tax relief is available on contributions to the policy to encourage saving for retirement (within Revenue limits). The formal name for a personal pension policy is Retirement Annuity Contract.

A PRSA is similar to a personal pension policy, designed by legislation to improve saving for retirement. It is a Revenue approved contract set up with a PRSA provider by an individual to save for retirement.

Tax relief is available on contributions to the policy to encourage saving for retirement (within Revenue limits). A Vested PRSA is a PRSA from where you have already taken a retirement cash lump sum and/or income.

A buy out bond (also known as a personal retirement bond) is a policy where you can transfer your pension fund if you leave a company pension scheme or if the pension scheme is being shut down.

The trustees set up the buy out bond for you and put you in control, so they don't have to be involved any more.

An executive pension plan is a Revenue approved occupational pension scheme set up by an employer under trust to save for one or more employees' retirement.

Tax relief is available on contributions paid by the employer and employee to encourage saving for retirement (within Revenue limits).

A group pension scheme is a Revenue approved occupational pension scheme set up by an employer under trust to save for a large number of employees' retirement.

Tax relief is available on contributions paid by the employer and employee to encourage saving for retirement (within Revenue limits).

The amount of tax relief on your personal contributions to all pension arrangements is based on your age and your earnings.

* for the 2024 and 2025 tax years, net relevant earnings are subject to a ceiling of €115,000 each year for the purpose of calculating tax relief.

Yes, because if all your pension funds total more than €2.2m, you'll have to pay an additional tax (currently 40%) on the excess.

If you have already taken a pension lump sum, and/or are being paid a pension, talk to your financial adviser as the limits may be different.

If you remain invested in your PRSA after taking a cash lump sum (some or all of which may be tax-free) or buy an annuity and/or invest in an ARF, any payments from them will be treated as income and taxed under the PAYE system.

Normally age 60, if you take early retirement from your employer (from age 50), you may be able to take your pension at the same time.

If you are in an occupation where early retirement is normal, the Revenue may allow you to take your pension as early as age 50.

If you are permanently unable to work due to serious illness or disability, you may be able to take your pension at any age.

Pension (Vested PRSA, ARF and annuity) payments are treated as income and taxed under the PAYE system (for example, income tax, PRSI, USC).

25% of the value of your pension policy.

Taking all your pension arrangements (both Irish and foreign) into account, the first €200,000 cash lump sum is tax free. The next €300,000 will be taxed at 20%. Anything over €500,000 will be treated as income and taxed under the PAYE system.

If you are a member of a company pension scheme, you have the option of taking a lump sum based on your salary and length of service instead.

If you have already taken some pension benefits or are in a defined benefits scheme, talk with your financial adviser as the limits that apply to you may differ.

If you have a personal pension or a PRSA, the maximum amount of pension depends on your policy value and annuity rates at the time.

If you are a member of a company pension scheme, it is 2/3rds final salary provided you have 10 years’ service to normal retirement age and you don't have other pension benefits from other employments.

An alternative to, or in combination with buying an annuity, you may have the option of investing in an approved retirement fund (ARF), or, if you’re invested in a PRSA, remaining invested after retirement (Vested PRSA), where you can draw down an income as and when you need it.

But, with an ARF or Vested PRSA, you could run out of money if:

• your investments perform poorly, or
• you live a long time, or
• you take too much income.

Talk with your financial adviser about which options are available and right for you.