IAre there any better alternatives to pensions in providing for my oul age & what is this regarding fees, I don't want to pay a load of fat cats my money for doing qwat all.
I accept the incentive of the tax "deferral" is good but surely 400 pm into say a Quinn Freeway Account for the next 25yrs until retirement and I can then cash it in and use it as I please instead of some company drip feeding it to me as regulations permit.
If you are paying tax at the top rate, you are losing approx 41% straight away because that 400 pm is after-tax. It will cost you the same amount (Eur 400 net) to invest Eur 677 into a pension scheme, as it is a tax-free investment. The Quinn Freeway Account is also subject to 23% tax when cashed in, as opposed to the tax-free pension money.
Most pensions schemes allow a person to withdraw a tax-free lump sum upon retirement, so it is not all about "drip-feeding".
To my mind, the financial benefits of availing of a pension scheme are unquestionable. There are many products out there, so you can choose the system that suits you best. In the long run, this is the most efficient way to provide for your future and that of your family.
So sorry for the blonde question, but is there a kind of "equity" based pension?
thanks
€100 lashed into a pension costs you roughly half that because of the tax relief and you can draw down 25% of the value of your fund tax free when you retire
How does tax relief on pensions benefit those individuals who pay 20% tax on income or are tax-exempt?
Hi KalEl,
Just wanted to clarify that by tax-exempt I didn't mean unwaged but, for example:
- head of one parent family
- working in private sector
- low income bracket
- not in receipt of SW supplement
- wishing to arrange supplementary pension provision
What, in your opinion, would be the best advice for this individual other than paying into an occupational pension fund (which would appear to be of greatest benefit to those in a higher income bracket)?
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