Nearly 50 and want to work less

Purple said:
find that prospect quite frightening. I'm in the same position but I think that it will lead to a very unequal society with all of the associated social problems.
Click to expand...
I’m the same, guberment needs to do something to address to avoid trouble down the road
 
And she would then be making class s prsi contributions which would qualify her for some amount of the state pension in the absence of her having any other employment.

You have 3 buy to let properties and you say there is a "hassle factor". Are you managing them yourself or paying a letting agent? Are they really much hassle? Maybe our tolerance for hassle changes over time. Certainly if similar or better returns overall can be achieved by putting their value in equities then yes I don't see a good reason to stay in the property game. But the devil is in the details.
 
Last edited:
One point that often gets forgotten is the dwindling CGT relief on a rental property that was previously a PPR (mentioned in a post)

If that property has gained value substantially since it was bought, there is an annual cost to you in relation to the reducing CGT relief. Hence if selling one of the properties, the one that was a previous PPR should be the priority to sell.
 
CharlieMac said:
Are you managing them yourself or paying a letting agent? Are they really much hassle?
Click to expand...
Through an agent but always risk of serious issue with tenant or big cost for something

I don’t see as huge hassle so concentration risk probably bigger issue
 
Hadn’t thought of it before but I assume it’s better taking 300k from pension and pay 20% tax rather than leave it in an arf when marginal tax might be higher on any income drawn down?

Only negative is no gross roll up on any investment returns

Or are there other considerations
 
peemac said:
One point that often gets forgotten is the dwindling CGT relief on a rental property that was previously a PPR (mentioned in a post)
Click to expand...
Actually sold that one about two years ago and bought a cheaper rental property with the same income bit certainly a consideration for people in that position
 
CharlieMac said:
And she would then be making class s prsi contributions which would qualify her for some amount of the state pension in the absence of her having any other employment.
Click to expand...
I assume you mean it counts for service determining the contributory pension?
 
Yes indeed, there's some info in this thread.

Your wife could check on revenue.ie to see her prsi record and make a plan to build up prsi contributions to qualify for the full contributory pension.

Maybe in your situation this won't be an issue but shame to leave anything on the table especially when those benefits could be earned in a passive way with existing assets.
Cameo said:
I assume it’s better taking 300k from pension and pay 20% tax rather than leave it in an arf when marginal tax might be higher on any income drawn down?

Only negative is no gross roll up on any investment returns
Click to expand...
What did you mean by this?
 
CharlieMac said:
What did you mean by this?
Click to expand...
I meant instead of just taking 25% tax free cash it properly makes sense taking 25% tax free cash plus 300k (which I believe is rated at standard rate) if the alternative is leaving the 300k in an ARF where any income drawn down is likely to be taxed at higher rate?
 
Cameo said:
Me approx. 850k (after taking Tax free cash, that’s earmarked for something else! )
Spouse 400k (after taking Tax free cash, that’s earmarked for something else!)
Click to expand...

Back in 2019, you were regretting that some of your assets were not in a pension wrapper.
But since then you have taken some of your assets out of the pension wrapper into your direct ownership.

I don't see the logic of this at all?

If you needed cash for something else, you could have sold an investment property.

Doing this would have been
  1. More tax efficient as it would leave your assets growing tax-free in the pension fund
  2. Diversified away from your concentration on property
Can you explain why you made that choice?


Are you planning to take more out?
 
Brendan Burgess said:
I don't see the logic of this at all?
Click to expand...
It was done to facilitate something my spouse wanted to do

In effect we only rreduced pension fund assets by 100k, and we saved 4% interest savings elsewhere, on the 100k so not a terrible decision IMO


Brendan Burgess said:
Are you planning to take more out?
Click to expand...
Not immently but wondering when I leave my current employment and if I decided not to work any nore would it make sense as I would still be paying tax at higher rate on any income drawn down
 
Cameo said:
In effect we only reduced pension fund assets by 100k, and we saved 4% interest savings elsewhere, on the 100k so not a terrible decision IMO
Click to expand...

Not a terrible decision in the context of your total wealth.

But it shows up another reason why you should sell an investment property and invest the proceeds in equities. If you need €100k at the moment, you have to do tax inefficient things like cash a pension early because you can't sell a bit of a property. If you had €400k in equities instead of a single property, you could sell some of them and have the €100k in a few days.
 
Very good point on property, There’s nothing wrong with illiquid assets until you need some liquidity; most recent posting and responses is making me think we should sell one if the opportunity presents itself, one is pretty under-rented in any case, selling one does crystallise a capital gain, might be better to think of current yield etc in the context of current value less any CGT liability

I guess there is a chance that TFC levels might change for the worse in the future too, and there’s a secondary time value of money aspect which might mean it’s advantageous to take cash early

I wasn’t too worried when I took the money because I was thinking I had loads of time to build up pension assets but I think I’m running out of steam the current corporate world I’m in
 
Fortune said:
This is only because you have tax inefficient property investment.
Click to expand...
But is it not also because I’d need to take enough income to pay outgoings which would mean regardless of what I am invested in I’d end up paying some tax at the higher rate
 
You must log in or register to reply here.
Menu
Log in
Register