Retirement planning in Ireland continues to evolve, and the Personal Retirement Savings Account (PRSA) remains one of the most versatile tools available for business owners and the self-employed. With Darragh Hogan, Financial Advisor, Milestone Advisory.

With recent legislative updates and the introduction of auto-enrolment for employees on the horizon, it is timely to highlight how PRSAs can be particularly beneficial for company directors and sole traders.

PRSAs for Company Directors

One of the most attractive features of a PRSA is the ability for a company to contribute up to 100% of a director’s salary in a given year. Unlike traditional occupational pension schemes or master trusts, which are often constrained by maximum funding rules tied to service and salary, the PRSA offers far greater flexibility.

This means directors who may have joined a company later in their career – and therefore have limited pensionable service – can make significant, tax-efficient contributions through their company into a PRSA. In practice, this allows directors to accelerate their retirement funding and maximise the use of company profits in a highly tax-efficient way.

PRSAs for Sole Traders

For sole traders, the PRSA remains the primary pension vehicle available. Contributions are made personally and benefit from income tax relief at the individual’s marginal rate, subject to Revenue limits.

This is especially important because sole traders will not be included in the State’s upcoming auto-enrolment pension scheme, which is being designed for employees. Sole traders must therefore take responsibility for their own retirement provision – and the PRSA provides a straightforward, flexible solution.

By contributing regularly to a PRSA, sole traders can:

• Reduce their income tax liability
• Build up a retirement fund over time
• Retain flexibility to vary or pause contributions depending on business cash flow

Why PRSAs Matter

The PRSA combines flexibility, portability, and tax efficiency, making it a valuable option for:

• Directors seeking to fund pensions beyond occupational scheme limits.
• Sole traders planning for retirement.

At Milestone Advisory, we help clients assess the best use of PRSAs in line with their circumstances, ensuring that contributions are structured tax-efficiently and invested in line with their risk profile and long-term objectives.

Final Thoughts

Whether you are a company director with limited service in an occupational scheme or a sole trader excluded from auto-enrolment, the PRSA remains a cornerstone of retirement planning. By making the most of its unique contribution rules and tax advantages, you can take control of your retirement future.

For more information, contact Darragh Hogan at Milestone Advisory: darragh@milestoneadvisory.ie