Strongly recommend you revisit this.I don't want to buy a house
I don't want to buy a house.
I don't have an accountant; although I realise I should go sort that out soon.
I advise the opposite.Don't start a pension scheme yet - you have plenty of time.
Hi BrendanWhatever about an accountant, do you realise that you should have paid the preliminary tax for 2023 in November?
Did you pay this?
If not, get onto an accountant immediately and pay the tax due to avoid interest and penalties.
@bogmandem I'm just wondering - are you based in Ireland?Annual gross income from employment or profession: ~$150k
Type of employment: Self employed / contracting for a US company
I graduated from uni this year. Working as a contractor in tech with annual contract value of ~$150k.
I would agree with a pension. The OP wouldn't notice €500 per month and it would build very nicely from there at his age.I advise the opposite.
You have an investment horizon of 50+ years and you should stuff your pension with equities today and avail of the tax relief on contributions and capital gains.
You are looking at a likely inflation-adjusted increase of 5x-8x by drawdown. It could even facilitate a very early retirement.
ETFs on the other hand don’t give you income tax relief on contributions and gains are subject to exit tax.
For a house I wouldn’t worry until you are ready. You will easily accumulate a deposit and get a mortgage on your income.
Got you. This is why I asked about sole trader or via Ltd Company (as Proprietary Director)Read back. I made no reference to his daily rate. I mentioned his level of earnings only to distinguish him from someone that may be doing casual or occasional contract work like a plumber or handyman typically gets hired ad-hoc for.
You have an investment horizon of 50+ years and you should stuff your pension with equities today and avail of the tax relief on contributions and capital gains.
You are looking at a likely inflation-adjusted increase of 5x-8x by drawdown. It could even facilitate a very early retirement.
ETFs on the other hand don’t give you income tax relief on contributions and gains are subject to exit tax.
Debatable, but certainly the best way to house yourself if you can get a mortgage and are relatively settled.Buying a house is the best way of saving by a long shot.
I’m no lover of the pensions industry but it doesn’t invalidate the argument! I just don’t think it’s possible to beat tax-relieved equities over decades if that is your horizon.These are the standard arguments used by the industry and I disagree with them.
Compound growth suggests the opposite. Heavy contributions now means the OP could dial it back in his 30s if his lifestyle changes or he wants to switch gears career wise.You will have plenty of time
Compound growth suggests the opposite.
Agree, and it opens up the potential to retire or semi retire or start a hobby business at 50.Debatable, but certainly the best way to house yourself if you can get a mortgage and are relatively settled.
I’m no lover of the pensions industry but it doesn’t invalidate the argument! I just don’t think it’s possible to beat tax-relieved equities over decades if that is your horizon.
Compound growth suggests the opposite. Heavy contributions now means the OP could dial it back in his 30s if his lifestyle changes or he wants to switch gears career wise.
Preliminary Tax is not payable in the first year of self-employment.
And penalties don't apply to non-payment of Preliminary Tax. Just interest.
According to revenueWhatever about an accountant, do you realise that you should have paid the preliminary tax for 2023 in November?
Did you pay this?
If not, get onto an accountant immediately and pay the tax due to avoid interest and penalties.
Brendan
Yes Brendan. That's how it goes. Some people find that double payment quite a hurdle.Thanks Tommy. I forget the basics.
So what happens in year 2?
Does he pay the tax for 2023 and the Preliminary Tax for 2024 at the same time?
Secondly, what harm starting a small pension contribution? Start as you mean to continue.
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