Keep it simple.What are peoples thoughts?
Incidentally, you ignore employer contributions in calculating your maximum tax-relieved contributions.including employer contributions, I would be at ~75% of max contributions before losing tax benefit
Keep it simple.
First, build a reasonable cash reserve (perhaps three months' net salary) and keep it on deposit. Then maximise your tax relieved pension contributions. Then use any available after-tax savings to pay down your mortgage ahead of schedule.
When your mortgage is paid off, maintain a high allocation to equities in your pension and start buying (tax free) State Savings Certs and Bonds.
What age are you?
What is your mortgage interest rate?
What is your salary/Spouses salary if applicable?
Do you have any other investments/debt?
If you are not on a tracker the normal generic advice is to prioritise.
1- Rainy day fund (3-6 months of household expenses depending on circumstances)
2- Overpay mortgage if not on a tracker
3- Pension investment. At a minimum match employer contribution to get full benefits. If you are in the higher tax bracket many would argue to priorities this over mortgage overpayments. Becomes more divisive when you are in lower tax bracket and carrying a mortgage. As you are looking to trade up I personally would focus on bringing down my current mortgage.
Equity built up in existing property would be treated as a deposit when trading up so no need to be investing in ETFs/Prize Bonds if you are not on a tracker. Use these funds to overpay mortgage.
Incidentally, you ignore employer contributions in calculating your maximum tax-relieved contributions.
Keep it simple.
First, build a reasonable cash reserve (perhaps three months' net salary) and keep it on deposit. Then maximise your tax relieved pension contributions. Then use any available after-tax savings to pay down your mortgage ahead of schedule.
When your mortgage is paid off, maintain a high allocation to equities in your pension and start buying (tax free) State Savings Certs and Bonds.
No, you can still get tax relief on contributions of up to 20% of your net relevant earnings (subject to a cap of €115k), regardless of any employer contributions.Sorry but does the 20% of earnings not on total contributions inclusive of employers? i.e. if for a 30 yr old it is 20% of salary and Employer contributes 15%, I could only contribute the remaining 5%?
Wouldn't you also achieve that by having a lower mortgage balance on your current PPR when you trade up?My goal is that I will need a chunk of cash when changing house as ideally I will get a bigger house whilst keeping the same LTV
Wouldn't you also achieve that by having a lower mortgage balance on your current PPR when you trade up?
Not really. The equity is the sales price less the outstanding mortgage. Less mortgage, more equity.So the way I look at is the ultimate Equity I would walk away with ends up with the final sale price and whilst this doesn't matter if there is a price reverse in the entire market, I am more concerned that the area I bought in is a bit of micro economy in property prices, if that makes sense?
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?