Approved Retirement Fund (ARF)
A post-retirement investment vehicle that holds your pension pot, lets you draw an income, and passes the residual to your estate.
An Approved Retirement Fund (ARF) is what most Irish retirees move the bulk of their pension pot into after taking the 25% tax-free lump sum. Unlike an annuity — which trades the pot for a guaranteed income for life — an ARF keeps the money invested and under the holder’s control, with drawdowns taken as needed.
Revenue requires a minimum “imputed distribution” each year: 4% of the ARF value from age 60, rising to 5% from 70 and 6% on pots above €2m. Drawdowns are taxed as income — PAYE, USC and PRSI apply just as they did on salary, although the higher pension-age USC rates may be lower than the working-age rates depending on total income.
The trade-off versus an annuity is investment risk. The pot can grow, but it can also fall, and a sustained sequence of bad returns combined with high drawdowns can deplete it. Many advisers recommend a “bond ladder” or low-volatility allocation to cushion the early years of retirement.
Use the ARF drawdown calculator to model annual withdrawals or the retirement income calculator for a full picture combining ARF income, state pension, and other sources.
Published 10 May 2026