before anything else.....you should be putting the absolute max into your pension - if you are over 30, this would be 20% i.e. 14k p.a. or about 1,166 p/m
it's tax-free saving, do it! absolute no-brainer
once you've changed to this, start thinking about other forms of saving
Pensions are not a tax free investment, Pensions are a tax deferred investment i.e. you pay tax on 3/4 of it on realising it. Furthermore you pay fund and admin costs in it, have no access to your cash until you're 60+ and generally they're pigs of investments that trade on people's ignorance and/or indifference to taking a more active role in their financial management. Buyer Beware!
Hi Folks,
Apologies if this seems like a silly question, but I don't know how much money I should be saving.
I am on 70k, am single and have no dependents, I have 2 rooms rented out bringing in €800 a month. My mortgage is around €1400 a month.
I put €200 13 times a year into my pension.
I have no car repayments, or loans of any sort. My credit card bill is around 1500 a month, I clear it month by month.
Pensions are not a tax free investment, Pensions are a tax deferred investment i.e. you pay tax on 3/4 of it on realising it. Furthermore you pay fund and admin costs in it, have no access to your cash until you're 60+ and generally they're pigs of investments that trade on people's ignorance and/or indifference to taking a more active role in their financial management. Buyer Beware!
can you please provide a reputable link to back up this claim? Thank you
Yes, check out revenue.ie and look up pensions.
roughly goes like this, when you invest in a pension you get tax relief at the top rate (assuming you have those type of earnings), and then you build up your pension in an approved fund or funds with no CGT on any gains made. However charges are significant here and often take the gloss off any gains.
Then when you retire you are allowed take 1/4 of fund tax free under current tax legislation and the other 3/4's has to go into an ARF which also incurs admin and management charges as Old Timer points out
, and then you pay tax at the appropriate rate when drawing down from this.
So Pensions are merely 3/4 deferred taxation (with management charges) and to my eye are for suckers!!
Yes, check out revenue.ie and look up pensions.
roughly goes like this, when you invest in a pension you get tax relief at the top rate (assuming you have those type of earnings), and then you build up your pension in an approved fund or funds with no CGT on any gains made. However charges are significant here and often take the gloss off any gains.
Then when you retire you are allowed take 1/4 of fund tax free under current tax legislation and the other 3/4's has to go into an ARF which also incurs admin and management charges as Old Timer points out
, and then you pay tax at the appropriate rate when drawing down from this.
So Pensions are merely 3/4 deferred taxation (with management charges) and to my eye are for suckers!!
Yes, check out revenue.ie and look up pensions.
roughly goes like this, when you invest in a pension you get tax relief at the top rate (assuming you have those type of earnings), and then you build up your pension in an approved fund or funds with no CGT on any gains made. However charges are significant here and often take the gloss off any gains.
Then when you retire you are allowed take 1/4 of fund tax free under current tax legislation and the other 3/4's has to go into an ARF which also incurs admin and management charges as Old Timer points out
, and then you pay tax at the appropriate rate when drawing down from this.
So Pensions are merely 3/4 deferred taxation (with management charges) and to my eye are for suckers!!
Yes, check out revenue.ie and look up pensions.
roughly goes like this, when you invest in a pension you get tax relief at the top rate (assuming you have those type of earnings), and then you build up your pension in an approved fund or funds with no CGT on any gains made. However charges are significant here and often take the gloss off any gains.
Then when you retire you are allowed take 1/4 of fund tax free under current tax legislation and the other 3/4's has to go into an ARF which also incurs admin and management charges as Old Timer points out
, and then you pay tax at the appropriate rate when drawing down from this.
So Pensions are merely 3/4 deferred taxation (with management charges) and to my eye are for suckers!!
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