G
Guest116
Guest
I am trying to get a simple example of the difference between starting a pension versus saving money into a deposit account.
Pension:
Assume 4% yearly fund growth and yearly contributions of 8k
Deposit:
Assume 4% interest rate and yearly deposit of 8k
Now I know you get tax relief on the pension at your marginal rate, lets say 41%.
Over 30 years what is the difference in terms of total fund? On the pension side your pension is taxed (and you can get a % of the fund tax free)but then you also have to pay DIRT on the interest from the deposit. But you have fund charges of about 1% etc.
Or is this just a no-brainer, the pension is always the better option?
If an employer also contributes then I assume it is even more of a no-brainer?
Thanks
Pension:
Assume 4% yearly fund growth and yearly contributions of 8k
Deposit:
Assume 4% interest rate and yearly deposit of 8k
Now I know you get tax relief on the pension at your marginal rate, lets say 41%.
Over 30 years what is the difference in terms of total fund? On the pension side your pension is taxed (and you can get a % of the fund tax free)but then you also have to pay DIRT on the interest from the deposit. But you have fund charges of about 1% etc.
Or is this just a no-brainer, the pension is always the better option?
If an employer also contributes then I assume it is even more of a no-brainer?
Thanks