A PRSA is a flexible pension product that helps individuals save for retirement. It is designed to be portable and accessible, meaning it can move with you if you change jobs and can be opened by employees, self-employed, or company directors.
The contributions to a PRSA can be made by the individual, their employer, or a combination of both. PRSAs were introduced to ensure that everyone has access to a retirement savings option, particularly those who do not have access to an occupational pension scheme.
One of the main advantages of a PRSA is the tax efficiency. Contributions qualify for income tax relief (within age-related limits), and the investment growth within the account is largely tax-free. At retirement, individuals can usually take up to 25% of the fund as a tax-free lump sum, with the balance used to provide retirement income.
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