How to invest €300k

A

aidank

Registered User
Messages
32
Age:
42
Spouse’s/Partner's age:
Single so this is an N/A

Annual gross income from employment or profession:
E70000


Type of employment:
Private sector employees

Expenditure pattern:
Saver, dont go on big holidays own big car, im good at sussing out bargins.

Rough estimate of value of home
Family property will be mine in 2 years time, so currently renting a room in shared house. So mortgage and debt free.


Other borrowings – car loans/personal loans etc
None

Do you pay off your full credit card balance each month?
Dont own a Credit Card

Savings and investments:
E300k gathered up from working over the last 15+years. All earning very little interest in the bank as its all just maturing from v low interest rate accounts over last few months.

Do you have a pension scheme?
Yes, I pay E750 per month into AVC and company also paying into pension, I have been paying since I started working.

Do you own any investment or other property?
No.

Ages of children:
None.

Life insurance:
Yes.

What specific question do you have or what issues are of concern to you?
What should I do with the 300k which is sitting there.

Thanks
 
You should materially increase your pension contributions.

You could be getting tax relief on contributions of up to 25% of your gross income at your age, regardless of any employer contributions. Building up after-tax savings instead of maxing your pension contributions is a mistake, unless you are saving for a short-term goal (such as a house purchase).

What is the current value of your pension pot and what is it invested in? It’s important to look at your finances holistically.

Does your future home need any money spent on it (eg to make it more energy efficient)?
 
Yes what Sarenco wrote should be your 1st priority.

For the 300k you could spread it around investment types/ products.
Consider an ETF tracking a world index or similar.
Maybe keep some in liquid saving with high interest. Look on this forum for threads on the topic of "Raisin"

Will you need some money available for modernizing / renovating the house once you take ownership?
 
Pension yes I am paying AVCs and have been for a good long time.

I worked for Company 1 who had a DB scheme 2006-2012. How do I check what that DB money will be worth when I retire.
AVCs 2006-2012 currently worth 90k

Company 2
Worked there from 2013-2020, again a DB pension. Will be worth 4k per annum when i retire.
AVC 2013-2020 currently worth 60k

Current employment
Making AVCs not worth a lot yet as only recently restarted.
 
aidank said:
Pension yes I am paying AVCs and have been for a good long time.
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Yes, but, as others have pointed out, you could be contributing a lot more - c. double what you're currently contributing - and still get full tax relief. In your situation - with housing seemingly soon to be secured, no debts and significant savings/assets, that's almost certainly a no-brainer.
aidank said:
I worked for Company 1 who had a DB scheme 2006-2012. How do I check what that DB money will be worth when I retire.
AVCs 2006-2012 currently worth 90k
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If it's a defined benefit scheme then the scheme administrators/trustees should be able to advise on what it should be worth at retirement.
 
aidank said:
Life insurance:
Yes.
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If you have no dependents and no mortgage you don’t need life insurance.

Otherwise I think you should increase pension savings dramatically even over and above tax-relieved limits. You’ll benefit from tax-free growth in capital than you won’t with any other investment product.
 
ClubMan said:
Yes, but, as others have pointed out, you could be contributing a lot more - c. double what you're currently contributing - and still get full tax relief. In your situation - with housing seemingly soon to be secured, no debts and significant savings/assets, that's almost certainly a no-brainer.

If it's a defined benefit scheme then the scheme administrators/trustees should be able to advise on what it should be worth at retirement.
Click to expand...

did some research last night and its 3.5k per annum at retirement that 2006-2012 pension is worth

Is there a way to estimate how i am doing financially regarding pension, those DB pensions wont take me far in 25yrs time in my inexperienced eyes
 
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The €3.5k per annum will increase by the CPI or 2% per annum (whichever is less) from 2012 onwards. You should receive a statement from the end of this year and annually going forward from both your DB providers stating what the current value of the preserved benefit is.
 
aidank said:
Is there a way to estimate how i am doing financially regarding pension, those DB pensions wont take me far in 25yrs time in my inexperienced eyes
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The amount that the DB schemes will pay out should be clear - at least the nominal amount if not the real amount adjusted for inflation and assuming nothing untoward happens to the DB schemes in the meantime.

For a DC pension all you can do is look at the current value, likely future contributions, and some assumed growth figure to get some rough idea of what it will be worth in terms of tax free lump sum and ongoing retirement income via an ARF or annuity. This is only going to be a rough guideline.

This thread might also be worth reading.

Key Post - My pension pot has reached €800k - should I stop contributing ?

I am starting a new role in a company that does not have a pension scheme. They will offer a PRSA as they are legally obliged to do but they is no offer of contribution. I am aged 51 and I have other pensions that mean that all my future income will be at the higher rate of tax. Am I correct in...
www.askaboutmoney.com
Don't forget to factor in the state contributory pension from 66 (at the moment anyway) assuming that you'll qualify for that via your PRSI contributions.

You haven't ever worked in the UK by any chance in case you might qualify for a UK pension too?

Key Post - UK State Pension - Make voluntary contributions to qualify for UK pension on top of Irish pension

Summary If you lived in the UK for at least three years and worked there for at least some of this time. You can make backdated contributions of National Insurance for up to 18 years which will cost you either £163 for each year purchased or £824 for each year purchased. The UK state pension...
www.askaboutmoney.com
 
aidank said:
Rough estimate of value of home
Family property will be mine in 2 years time, so currently renting a room in shared house. So mortgage and debt free.
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Is this 100% certain to happen?
Will you have any CAT tax bill as a result?
Is there any possibility that you may need your savings to secure alternative housing within the next few years?
 
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For something to do right now, you've got 2 weeks to make an AVC for 2022, as long as you were working in your current company last year?

If you can put in 8000 for example and you're under your tax relief threshold, you'll 3200 handed back to you once you do your tax return. Has to be before Nov 15 so need to be quick.

You can also put in money now for this year and claim that tax back next year if you wanted.
 
ashambles said:
For something to do right now, you've got 2 weeks to make an AVC for 2022, as long as you were working in your current company last year?
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This has come up before. I'm pretty certain that for a PAYE individual using myAccount the deadline for claiming pension tax relief on 2022 income was yesterday (October 31st) and not the self-assessed ROS extended deadline of 15th November.

Tax relief on pension contributions

This page outlines the tax relief available for pension contributions
www.revenue.ie www.revenue.ie
You may pay a once-off or special contribution after the end of a tax year. This must be done before the following 31 October.

If you make this payment, you can choose to have the tax relief for the contributions allowed in the earlier tax year. This must also be carried out before 31 October of the following year.
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Others disagreed with me (last year?) but the above is my experience and I was told as much by Revenue in the past.
 
Unless it's changed this year Irish Life have told me when I've asked it's ok - and I specifically asked could the payment be made up to the 15th of Nov as the Revenue site isn't clear.

This older note from chartered accountants seems to say via Revenue that "payments of ..(AVCs).. qualifies for the extended Pay and File deadline".

Revenue e-Brief No. 32/2005

Subject: Extended deadline for ROS Customers in respect of RACs, PRSAs & AVCs

Under Sections 787(7) and 787C(3) TCA97 relief may be claimed in respect of a Retirement Annuity Contract (RAC) or a Personal Retirement Savings Accounts (PRSA) payment made on or before the return filing date. Where a person qualifies for the extended Pay & File deadline available to ROS customers by both filing and paying online, the deadline for making RAC and PRSA payments and claiming the relief is also extended to 17 November 2005.

This extended deadline also covers payments of Additional Voluntary Contributions (AVCs) made under Section 774(8) or Section 776(3) TCA97, where the person qualifies for the extended Pay and File deadline.
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www.zurich.ie

Everything you need to know about pension contributions

Whether you are self-employed or already in a company pension scheme or in non-pensionable employment, the need to save for a pension for your retirement is abundantly clear. So, in this article we are just going to focus on the tax saving benefits which are available from the government to...
www.zurich.ie www.zurich.ie
Taxpayers who file and pay online via ROS or myAccount may avail of the Revenue’s extended return filing and payment date to make an election and pay a contribution.
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This download from Irish Life for 2023
https://my.bline.ie/media/81/download
Those who are required by Revenue
to file a Form 12 for 2022 can opt to
file online in which case they have
until 15th November 2023 to pay their
pension contribution and submit their
tax return.
Click to expand...
 
the pension contribution sounds like a good idea, any ideas on what to do with the 300k
 
aidank said:
Expenditure pattern:
Saver, dont go on big holidays own big car, im good at sussing out bargins.
Click to expand...

aidank said:
E300k gathered up from working over the last 15+years. All earning very little interest in the bank as its all just maturing from v low interest rate accounts over last few months.
Click to expand...
aidank said:
Expenditure pattern:
Saver, dont go on big holidays own big car, im good at sussing out bargins.
Click to expand...

aidank said:
Age:
42
Click to expand...

Live a little. You could be dead in a few years. There's no point in being a rich corpse. You'll have a home and, based on the information above, at least €500 (probably a fair bit more) a week of income when you retire. I'd be concentrating on enjoying life more right now.
Go on some of those big holidays, bring some friends, and if you like cars then buy a better one. The most valuable thing you can buy with money is good experiences that become good memories.
 
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