Turning a lump sum now into a pension later?

C

Calico

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Can anybody give me advice on the above? I'm 30 y/o with a spotty employment history.....and have not allocated anything for my pension needs in 40 odd years time (if i make it that far.......:eek:).

I have about 55k of a lump sum that I would like to use now to create some kind of pension for myself in the future. I haven't settled in a career as yet and given past experience, I'm sure I'll continue to chop and change and never really build up a pension....(currently between jobs AGAIN)

I know I could just invest it in a low-charging fund and come retirement hope after paying 20% CGT that there is enough there to buy an annuity but I was wondering if maybe there were other ways of achieving my goal that I haven't considered. I have no idea about pensions and their tax implications etc.

Thanks,
 
Why would you not just open a low charges PRSA or personal pension plan and contribute to that when working in order to benefit from the significant income tax and PRSI/health contribution reliefs available (up to 47% relief - 41% tax, 4% PRSI and 2% health contribution - available on up to 20% of your gross earnings at your age for example)? It would make little sense not to avail as far as possible of the tax breaks available when saving for retirement in my opinion. If you don't know much about pensions and the tax issues then start reading other threads in this forum starting with the key posts etc. Also the Pensions Board and It's Your Money websites are worth checking out.
 
If some of your savings came from self-employed income from 2007 then you should be able to avail of the tax breaks Clubman outlines for that income as you won't have done your tax return for 2007 yet. This means, for example, that you could turn €5300 of your savings into €10,000 in a pension fund thanks to the tax man's generous incentives.
 
Brouhahaha said:
This means, for example, that you could turn €5300 of your savings into €10,000 in a pension fund thanks to the tax man's generous incentives.
Click to expand...
What's the relief for self employed? Up to 41% income tax plus 5% (?) PRSI plus 2% health contribution (do self employed pay this?) = 48% and do the usual age related pension tax relief limits apply?
 
Yes the age related limits (15%, 20%, 25% and so on) are the same for self employed as for PAYE workers.
 
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