Sole Trader Pension

[return guide]

Hi Guys,

My wife has been a sole trader earning €20k a year for 4 years. She has a small pension fund with her previous employer.

My question is what would be the best option for her? Is there a maximum she can invested to limit her tax bill?

Apologies if these have been asked before, I did a quick search but could not find anything.

Thanks.

RG

 

[LDFerguson]

As a sole trader, your wife can make contributions (one-off, regular or both) to either a Personal Pension (aka RAC) or a PRSA, or both. She can get tax relief on contributions up to limits governed by her age.

You should consider your overall financial position as a couple, both now and in retirement before deciding to start making contributions. For example, if your own pension is going to be sufficiently large that as a couple you'll be on the higher rate of tax in retirement, but she'll only receive tax relief at 20% on her contributions on the way in, perhaps a long-term savings plan might be more beneficial.

 

[return guide]

Thanks LD