atlantic dream
New Member
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I have read many of the very informative threads on here and from that have picked up some of the basics I hope in what is a very complicated area. I am now at the point that I need to jump onboard some type of investment or pension and I suppose I am seeking some confirmation that I have picked up things correctly.
I am a PS since 1997 so paying full PRSI. I am now 53 and in an extremely stressful role which is now starting to take its toll on my physical health and I have concluded I need to start to plan to step away hopefully at 55 or 56. That would allow me complete a current project that I am personally committed to and then depart. A number of bereavements this year in close family and friends have deepened my resolve that life is for living while one can.
Using the modeller, for CNER at 55, I would have built up a pension of approx 160K lump sum and 39K annual pension. This does not include any supplemental pension and my understanding is that this would not become payable until 60 in any event and would require me to have exhausted JSB before payment.
Looking at my year end figures for last year and applying the threshold of 30% on 115,000 with deductions of what I have paid in Superannuation deductions I estimate that I have capacity to claim tax relief on approx 25k further contributions into an AVC
Am I correct in thinking I could claim this against tax from 2022 if I can get it set up in time before end of Oct?
Does this mean I could repeat this exercise again for the tax years 2023, 2024 & 2025 giving me in or around 100k of an investment in total?
My spouse is in more or less the same position and would have capacity to claim relief on 25k or so also
Due to an inheritance I am in funds to make that investment. My mortgage is small and due to be cleared next year.
Subject to correction on this, I have estimated that I would be allowed to top up my lump sum by in the region of 40k from an AVC before paying tax.
( I have done the calculations from another thread as to reducing my overall LS to allow for the less than 40 years service - I would have just shy of 27 years full service at 55 allowing for some periods of part time work and TRR when unwell some years ago. I did that against my full salary of 179K which does then come out above the 200k threshold in any event. I am hoping therefore that the 200k threshold applies and that that is not further reduced )
If I had 100k in the AVC, is there restrictions on what I can do with the balance- for example, could I draw 13K p.a. to represent the absence of the supplemental pension? Is that wise if the income tax then becomes payable at the higher rate? Is it possible to just transfer it to another form of investment and allow it become part of my estate in due course if not otherwise needed. Or is there a danger here that I will be overfunding this - I admit to not really properly understanding that risk!
I do not think day to day cashflow will be an issue. My spouse is also a PS worker who intends to work for another 3 to 4 years after I turn 55 so we will maintain a decent income. In the fullness of time, their pension arrangements will perhaps a LS of 124K and a pension of around 37.
We hope to sell our Dublin home and retire to the west of Ireland where I am from once retired. This will generate further liquid funds. In the fullness of time, our only child will be facing a CAT bill, if that regime stays the same. We are utilising the small gift exemption and would do so if there are grandchildren etc.
We have both been PAYE all our working lives and have never claimed anything beyond routine medical expenses which I do each year on MyAccount. Am I correct in thinking that is where I would claim for any AVC contributions made? I usually do that for the family as a unit. Would my spouse have to set up another MyAccount to claim their own AVC
My concern really is that I want to use the most of reliefs that are available as this is the first time we have been in a position to invest in our future in that way. I do not want to bring a further tax headache down the road. I have read the latest posts re Standard Fund Threshold with a degree of panic but my basic multiplication of pension by the factor mentioned makes me think I am OK but then I wonder would an AVC of 100k upset that again.
Hopefully my questions are not too idiotic. I have read so much on here over the last few years and do not want to waste anyone's time. I am happy to take advice externally from a financial advisor as to type of AVC etc but I want to be surer of my footing before embarking on that conversation.
many thanks
I am a PS since 1997 so paying full PRSI. I am now 53 and in an extremely stressful role which is now starting to take its toll on my physical health and I have concluded I need to start to plan to step away hopefully at 55 or 56. That would allow me complete a current project that I am personally committed to and then depart. A number of bereavements this year in close family and friends have deepened my resolve that life is for living while one can.
Using the modeller, for CNER at 55, I would have built up a pension of approx 160K lump sum and 39K annual pension. This does not include any supplemental pension and my understanding is that this would not become payable until 60 in any event and would require me to have exhausted JSB before payment.
Looking at my year end figures for last year and applying the threshold of 30% on 115,000 with deductions of what I have paid in Superannuation deductions I estimate that I have capacity to claim tax relief on approx 25k further contributions into an AVC
Am I correct in thinking I could claim this against tax from 2022 if I can get it set up in time before end of Oct?
Does this mean I could repeat this exercise again for the tax years 2023, 2024 & 2025 giving me in or around 100k of an investment in total?
My spouse is in more or less the same position and would have capacity to claim relief on 25k or so also
Due to an inheritance I am in funds to make that investment. My mortgage is small and due to be cleared next year.
Subject to correction on this, I have estimated that I would be allowed to top up my lump sum by in the region of 40k from an AVC before paying tax.
( I have done the calculations from another thread as to reducing my overall LS to allow for the less than 40 years service - I would have just shy of 27 years full service at 55 allowing for some periods of part time work and TRR when unwell some years ago. I did that against my full salary of 179K which does then come out above the 200k threshold in any event. I am hoping therefore that the 200k threshold applies and that that is not further reduced )
If I had 100k in the AVC, is there restrictions on what I can do with the balance- for example, could I draw 13K p.a. to represent the absence of the supplemental pension? Is that wise if the income tax then becomes payable at the higher rate? Is it possible to just transfer it to another form of investment and allow it become part of my estate in due course if not otherwise needed. Or is there a danger here that I will be overfunding this - I admit to not really properly understanding that risk!
I do not think day to day cashflow will be an issue. My spouse is also a PS worker who intends to work for another 3 to 4 years after I turn 55 so we will maintain a decent income. In the fullness of time, their pension arrangements will perhaps a LS of 124K and a pension of around 37.
We hope to sell our Dublin home and retire to the west of Ireland where I am from once retired. This will generate further liquid funds. In the fullness of time, our only child will be facing a CAT bill, if that regime stays the same. We are utilising the small gift exemption and would do so if there are grandchildren etc.
We have both been PAYE all our working lives and have never claimed anything beyond routine medical expenses which I do each year on MyAccount. Am I correct in thinking that is where I would claim for any AVC contributions made? I usually do that for the family as a unit. Would my spouse have to set up another MyAccount to claim their own AVC
My concern really is that I want to use the most of reliefs that are available as this is the first time we have been in a position to invest in our future in that way. I do not want to bring a further tax headache down the road. I have read the latest posts re Standard Fund Threshold with a degree of panic but my basic multiplication of pension by the factor mentioned makes me think I am OK but then I wonder would an AVC of 100k upset that again.
Hopefully my questions are not too idiotic. I have read so much on here over the last few years and do not want to waste anyone's time. I am happy to take advice externally from a financial advisor as to type of AVC etc but I want to be surer of my footing before embarking on that conversation.
many thanks