A Personal Retirement Savings Account (PRSA) is a type of retirement savings account that allows you to save for when you retire. It does this by allowing you to contribute tax-free money into the account, so it can grow faster than if it were in a standard bank account. There are two main types of PRSAs: defined contribution, where your employer chooses how much they put into your fund and you have no control over what happens with them; and defined benefit, which means that they will pay out a specified amount when you retire.
A PRSA is a Personal Retirement Savings Account.
What is a PRSA? A PRSA is a Personal Retirement Savings Account. It’s an alternative to a pension and one of the most tax-efficient savings vehicles available in Ireland. You can invest up to €3,000 per year in your PRSA and choose from a range of funds that suit your needs and risk appetite.
You have complete control over how your money is invested; there are no restrictions on what types of investments you make with it or when you access them (unlike traditional pensions). A good example would be if someone wanted to invest in property: they could put their entire contribution into buying rental properties instead of investing in stocks or shares, which might not provide them with sufficient returns on their investment over time due to volatility in those markets
It is a form of savings scheme.
A PRSA is a form of savings scheme. It allows you to contribute money towards your retirement, and you can withdraw it if necessary.
You can open a PRSA with any financial institution that offers this service (for example, banks). The amount that you pay into a PRSA depends on how much money you earn each year and how much time has passed since opening your account.
It provides tax relief on contributions made.
Your PRSA contributions are not taxable. The interest you earn on your PRSA account is also tax-free, provided it remains in the account until you withdraw it. When you do decide to take out money from your PRSA fund, however, it’s considered income and therefore subject to taxation at the same rate as any other income source.
The amount you can contribute to a PRSA each year depends on your age and how much you earn.
The amount you can contribute to a PRSA each year depends on your age and how much you earn. The maximum contribution for an employee earning less than €60,000 is €3,000. For example:
- If you’re under 40 years old, then the maximum amount is €1,250 (or half of your PRSI payment).
- If you’re aged between 41 and 50 years old (and earning up to €60,000 per annum), then the maximum amount is €2,500 (or one third of your PRSI payment).
You must be over 16 years old to open an account.
You can open a PRSA at the age of 16. But if you are self-employed, or a student, then it’s possible to start one at 18 years old instead.
You will need to give your employer the details of your PRSA before starting work with them.
You will need to give your employer the details of your PRSA before starting work with them. You can do this by completing a form and giving it to your employer, or online if they have an online payroll system.
You can also find out more about PRSAs on the Revenue
PRSAs are designed to help you save for retirement
PRSAs are designed to help you save for retirement. You can contribute up to €3,000 a year, which means that if you’re in a position to do so, it makes sense to put as much money into your PRSA as possible each year. That way, when it comes time for retirement and you’ve been contributing consistently all along–and have saved up enough that way–you’ll have more funds available than if you hadn’t made those contributions at all (or only started saving later).
PRSAs are also tax-efficient: The interest earned on contributions isn’t taxed until withdrawn from the account during retirement; meanwhile any withdrawals made before then are taxed at ordinary income rates rather than capital gains rates (which would otherwise apply). This means that every euro saved could potentially grow even faster over time because of this built-in benefit!
Conclusion
If you want to start saving for retirement, it’s important that you do so early on in your working life. PRSA are designed to help people who are not saving enough for their retirement by providing them with an opportunity to contribute more money than they might otherwise have been able to afford. It’s also worth noting that PRSAs can be opened by anyone over 16 years old and will remain open until the age at which they retire (usually 65 years old).
