Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

Throw money at pension or take it (after tax) and run?

  • 29-08-2013 5:17am
    #1
    Andrewf20
    Registered Users, Registered Users 2 Posts: 3,250 ✭✭✭


    Hi folks,

    A pal of mine is closing up a business and has 14,000 euro that they can either put into a pension (tax free) or take now and run but get taxed 50% on it. i.e. Take home 7K.

    Which do you's think would be a better idea? I think they are looking to buy a house next year and are thinking it might be better to keep the 7K for the deposit etc. I dont think they have much of a pension already, I think due to the fact that they were a small business owner.

    All thoughts welcome. Thanks :)


Comments

  • #2
    pinkbear
    Registered Users, Registered Users 2 Posts: 176 ✭✭pinkbear


    I would definitely put it in pension. Retirement will come around some day and he'll need every last cent of it. It's easier to earn another 7k now than 14k in 40 years time.


  • #3
    eyescreamcone
    Banned (with Prison Access) Posts: 2,562 ✭✭✭eyescreamcone


    How old is your "friend"?

    If he's 50+ then definitely throw it at the pension.


  • #4
    Andrewf20
    Registered Users, Registered Users 2 Posts: 3,250 ✭✭✭Andrewf20


    eyescreamcone wrote: »
    How old is your "friend"?

    If he's 50+ then definitely throw it at the pension.

    Mid 30s. Dave McWilliams writes very pessimistically about pensions I noticed though.

    The pension saga is something ill have to start thinking about myself.


  • #5
    Andrewf20
    Registered Users, Registered Users 2 Posts: 3,250 ✭✭✭Andrewf20


    pinkbear wrote: »
    I would definitely put it in pension. Retirement will come around some day and he'll need every last cent of it. It's easier to earn another 7k now than 14k in 40 years time.

    Thanks for the post pinkbear. Im far from being an expert in pensions, but I guess the one thing im thinking of here is inflation. 14K in 40 years will probably be a weekly wage. I know pensions should grow as time goes on but I think there is a concern that any interest / gain on their initial investments (14K now say) could be wiped away with other future potential economic crashes.

    7K put towards a deposit for a house would help with slightly reduced mortgage repayments over the years. I think this throws a spanner in the works also. (Theres probably a way to get some stats on the potential mortgage interest savings on this - mortgage calculators etc).


  • #6
    keeponhurling
    Registered Users, Registered Users 2 Posts: 5,398 ✭✭✭keeponhurling


    Gernally for pensions you can choose where to invest, so you can select a very secure fund if you are worried about market crashes.

    However 14k won't be worth too much at retirement, so you'll want to be getting some sort of investment return in the meantime 30 years or so


  • Advertisement
Advertisement