Post-retirement ARF investment
Keep your pension working after you retire, drawing an income you can rely on while the balance stays invested for the years ahead.
What it is
An Approved Retirement Fund, or ARF, is where many people put their pension pot at retirement instead of buying an annuity. Rather than swapping the fund for a fixed income for life, you keep it invested and draw an income from it, with the flexibility to vary what you take and to leave whatever remains to your family. The trade-off is that the fund stays exposed to investment markets, so it needs managing with care.
ARF or annuity
An annuity gives a guaranteed income for life but no flexibility, and usually nothing left for your family. An ARF keeps you in control and leaves an inheritance possible, but it carries investment risk and the chance of running down if you draw on it too hard. Neither is automatically better, and we help you weigh them against your circumstances and your other income.
Who it is for
- People reaching retirement with a pension pot to draw from
- Those who want flexibility and to leave a fund to their family
- Retirees who want their money to keep working, not sit still
- Anyone deciding between an ARF and an annuity
How it works
At retirement, after taking any tax-free lump sum, you move the balance into an ARF. You choose an investment strategy matched to how much income you need and how much risk you are comfortable with, then draw a regular or occasional income. On death, an ARF can pass to your spouse or your family, with the tax treatment depending on who inherits.
The imputed distribution rule
Revenue treats you as drawing a minimum amount from your ARF each year, whether you actually take it or not, and taxes you on it. The minimum is 4% a year from age 60, 5% from age 70, and 6% for ARFs of €2 million or more. Any income you draw is taxed as income through PAYE. The real risk to manage is drawing too much too soon, or being invested too aggressively or too cautiously, either of which can leave the fund short later. Setting a sustainable withdrawal level and the right investment mix is the whole game, and it needs reviewing as you go.
What would my ARF pay me in retirement?
An ARF keeps your pension invested after you retire while you draw an income from it, and the question that matters is how much you can take without running it down too fast. Enter your fund value, your age and the rate you plan to draw, and this shows the income that produces, alongside the minimum Revenue treats you as drawing whether you take it or not. Income from an ARF is taxed through PAYE, so what reaches you is less again. Talk it through with one of the team and we will set a level built to last.
ARF drawdown calculator
The minimum Revenue treats you as drawing each year, and what your chosen rate would pay you.
Fill in the fields above and press Calculate.
Why talk to BDS
David Sheahan plans drawdown for clients across Limerick, Dublin and Galway, setting the investment strategy and a sustainable income and reviewing both as markets and your needs change. Because we are not tied to any provider, the strategy serves you, not a product provider.
Common questions
An ARF offers flexibility and inheritance; an annuity offers a guaranteed income for life. We compare them against your circumstances and other income.
A sustainable rate depends on your age, your fund and the markets. Revenue also treats a minimum as drawn each year. We set a level built to last.
It can pass to your spouse or family. The tax treatment depends on who inherits it, which we plan for in advance.
Yes. Income you draw from an ARF is taxed as income through PAYE.
Other ways we invest
.jpg)
Important information
Tax rates, reliefs and thresholds referred to here are set by Revenue and apply to the 2026 tax year, including the exit tax reduction to 38% from January 2026. They can change in future Budgets and Finance Acts, and the right approach depends on your own circumstances. The examples are illustrations, not projections of return.
David Sheahan Insurance & Investments Ltd t/a BDS Financial is regulated by the Central Bank of Ireland. Reg. no. 115813. Offices in Limerick, Dublin and Galway.
This content is general information and is not financial advice. The value of investments can fall as well as rise.
Book an investment review with David.
Expert financial advice from Limerick, Dublin and Galway. No obligation.