What does your pension look like?What investment method would you recommend for someone who is a low income earner on 20% tax (by choice- suits work/life balance), late 40s mortgage free, frugal.
That is simply untrue.Every Irish personal finance investing method seems to benefit those paying 40% tax,
It looks dreadful as I have only just begun having one.What does your pension look like?
did you start avc?It looks dreadful as I have only just begun having
as Marc says above, avc would be more tax efficient. every 100 you invest only costs 80.I was thinking of investing/saving for 14 years then maxing out an avc for the last 3 years of my working life by which time I may be on the higher rate of tax. I wish we had simple ways to do this like in the US or UK, with their roths and their isa’s. The SSIA was so easy for me as a regular person to understand back in the day.
as Marc says above, avc would be more tax efficient. every 100 you invest only costs 80.
Agree, a mix of saving into a pension and regular savings/investments can work better - not always in terms of maximizing tax relief but in terms of getting your money when you need it. I could easily see a future government, for example, pushing back the age people can access pensions.There should be growth over the lifetime of the investment. But there will also be fees and charges. And drawdown will also attract 20% tax plus USC (and potentially PRSI, depending on age at drawdown). Also, the use of the money is locked off until retirement. This protects the investment but it is also a cost as regards life choices, especially as regards unforeseen circumstances. (One of which is not even surviving until retirement!)
There are potential rewards but as a life-choice it is not a "no-brainer".
This is a common misconception.There should be growth over the lifetime of the investment. But there will also be fees and charges. And drawdown will also attract 20% tax plus USC (and potentially PRSI, depending on age at drawdown). Also, the use of the money is locked off until retirement. This protects the investment but it is also a cost as regards life choices, especially as regards unforeseen circumstances. (One of which is not even surviving until retirement!)
There are potential rewards but as a life-choice it is not a "no-brainer".
Many people in retirement only pay an effective rate of tax of around 9%
And not to mention the 25% tax free lump sum optionThis is a common misconception.
Many people in retirement only pay an effective rate of tax of around 9%
So tax relief at source combined with genuine gross roll up will mathematically trump alternative investments
Pensions are also available from age 50 so hardly tied up indefinitely
There is no such option in a public service pension. But there is the possibility of using an AVC to bring the tax free lump sum up to the maximum of 120/80 of final salary. Maura has indicated elsewhere that she will not have full service at retirement. Provided she has at least 20 years service she can fund to bring the tax-free sum to this level. Many people use last minute AVCs for this purpose. It is always a good idea to max this out.And not to mention the 25% tax free lump sum option
Sorry, didn't realise that it was a public service pension.There is no such option in a public service pension. But there is the possibility of using an AVC to bring the tax free lump sum up to the maximum of 120/80 of final salary.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?