I'd be very concerned about putting cash into a business that this stage of his life as if it goes wrong there really is not much time to turn it around.
Eh Jim, this is a bit rich. Older people that start or in fact keep businesses going, are often very successful. We haven't been advised what merits or qualification the person concerned holds, but in fairness to him and others they should be allowed and given a chance to move forward and to be allowed for their ideas to blossom.
That might be your opinion and it doesn't and shouldn't be classed as Gospel. What are the other options for older people. Invest in Bank shares and lose the lot. Or better still invest in Managed funds and watch a vast amount of the original capital or even profit been squandered in Management Fees.
One of the key decisions here is the guaranteed annuity rate of 9.82%.
If they take any tax free cash they have to be absolutely certain that they will earn a return of at least 9.82%pa gross on this money for the whole of the rest of their life however long they live just to break even. Hummm, that's a tall order. The average annual return on the S&P 500 has been about that and that is the average annual return from a big slice of corporate America for the best part of a Century!!
I'd look at taking the full pension and no tax free cash and then seeing if you could borrow 25k as a business loan.
When the bank asks how you propose to repay the loan, I would point to the guaranteed income of €5219pa.
.guaranteed annuity rate of 9.82%
If the OP goes to the bank to borrow the money they will get some "free" business consultancy advice.
If the bank advances them the money its because they have made a good business case for doing so.
If the bank does not advance them the money, one of the reasons will be that it isn't a good business proposition which would address your concerns surely?
I can't get over the .
BOI offered me 2% as an annuity on my PRSA. Who, in this day, is paying 9.82%?
The Guaranteed annuity rate arises from the type of policy that was originally taken out. It was quite common up to the mid-eighties to be offered the option at retirement (whether that was immediate or 30 years away) to take a guaranteed annuity for life of up to 10% of the maturity proceeds.I can't get over the .
BOI offered me 2% as an annuity on my PRSA. Who, in this day, is paying 9.82%?
The Guaranteed annuity rate arises from the type of policy that was originally taken out. It was quite common up to the mid-eighties to be offered the option at retirement (whether that was immediate or 30 years away) to take a guaranteed annuity for life of up to 10% of the maturity proceeds.
Not completely daft given the prevailing high interest rates when these policies were sold and absolute lack of any scenario testing by the providers (which is understandable when you are using a pen and paper!!).
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