Best way of funding wife's pension

J

joey123

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I am employed in a public service job with standard public service pension. My wife has just finished working full time to raise the kid (and probably kids in due course) that is on the way. We want to start a pension for her. She will be self emplyoed part- time which could give her an income of €7-8Kpa. My income puts us into the 42% bracket

The SSIA transfer potentially gives €2,500 on top of a €7,500 investment into a pension. This seems like one option to start things off.

My main question is there a way a pension can be structured to be deductable from my 42% tax but benefit her?
 
Hi there - you could fund a PRSA AVC - but it would have to be a policy in your own name (does she not trust you!?).

Or she could set-up a PRSA and contribute to it, her contributon limits would be lower (because of her salary being lower)...but at least your combined income would be reduced so paying less at the marginal rate.

Marginal rate relief is better than the SSIA top-up offer, but then again the SSIA top-up can be simply done in your wife's own name.
 
Thanks. I'll look into the PRSA AVCs more

Her income will be too low and unreliable for a reasonable amount of contributions.

If the PRSA AVC is in my name can the value in the fund transfer to her if I die before 60? After 60 what are the options to ensure she has an income if I die? How can tax e.g on a lump sum be minimised? i.e transfer to her?
 
Yea well you could give her the money to contribute, it will have the same net effect, a lower tax liability for you as a couple.

But the contribution limit for her would be low, if earnings are low...i.e. if she is between 30 and 40 max contribution would be 20% of earnings.

Yes it would pass to her as part of your estate if you were to die before retirement.

If you died after retirement (you would probably take the AVC in form of Approved Retirement Fund - an ARF) she would be able to transfer it to an ARF in her own name with no tax on that transfer to her name.
 
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