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Remember that for each €1 into your pension (which includes full tax and PRSI relief) will compare to as little as €0.53 from net income into your non pension alternative savings/investment fund so the latter would need to grow by almost 100% just to keep pace with the pension.
Tax relief of up to 41%, PRSI relief of 4% and health contribution relief of 2% means the possibility of up to 47% relief for high rate taxpayers on Class A PRSI. So each €1 contributed to your pension could cost as little as €0.53 from net income with the additional €0.47 coming from relief.
Timing the market is a mug's game. Unless you are already close to retirement and need to gradually shift into less volatile investments as the time to draw down benefits nears you might be better off sticking with high equity/risk-reward funds and riding out any volatility over the long term.
I don't really know what you mean by "50% debt" above!?
The number of switches allowed and the charges that may apply depend on your specific pension terms & conditions. What charges generally apply on your pension (per contribution, annual management charge etc.)? Is it competitive?
Depending on your circumstances you might even want to increase your contribution above 10% of gross. At age 30 you can contribute up to 20% and get full tax/PRSI relief. If you are contributing out of net income and not via payroll (where relief is granted at source) then you need to claim PRSI back manually once tax relief has been claimed. See the Key Posts.
If in doubt get independent, professional advice.
In my opinion a 30 year old should generally not have significant pension investments in asset classes such as bonds/gilts/cash etc. and should probably aim to be investing in high equity content/risk-reward funds instead. You are talking about a c. 30+ year investment here so you need to look at the long term picture and the fact that equities are likely to outpace most or all other investments over that sort of timeframe even if they may be more volatile along the way.
As far as I know pensions are the only option here.Sidenote: Is there any other investment or saving scheme which is taken from you salary before tax?
All things being equal this is correct. In particular as long as the pension charges are competitive, the range of funds available is as wide as possible and you choose funds appropriate to your specific needs you are much better off saving towards retirement via a pension. The main downside is that the money is locked away until retirement although this could be a blessing in disguise (e.g. you can't blow it on other stuff even if you wanted to!It doesnt seem worthwhile to invest €0.53 per €1 when you can be investing the full €1.
I'm assuming that you are investing for retirement? The AAM Guide to Savings & Investments and the www.itsyourmoney.ie consumer guides cover the sorts of things to consider when planning short, medium and long term investments.I guess it all depends what i am investing for doesnt it?
As far as I know pensions are the only option here.
Not as far as I know.Are there ANY alternatives which give similar tax benefits over a shorter term?
In that case a pension would seem to be your only option. Remember that most pensions offer a range of different funds with different asset mixes, risk/reward profiles etc. so it's not always a case of all pensions or their constituent funds doing poorly all of the time!I absolutely refuse to pay 11K to Revenue in order to "biscuit-tin" 12K in cash
...but I am hearing reports of a possible 10 year recovery period for existing pension schemes...
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