Where to put savings until i can join company pension scheme for a year or so?

Fiyatoe

Hi all,

I can't join the company pension scheme until I'm 30 next year, just turned 29. (big 4 firm) i think the minimum contrib. with it is 3% and company contributes 7% until you are 35, then it's 9%. Irish Life is provider

Anyway - I have about €5K in savings. I own 2 properties - one that i live in myself , and one that i rent out and pay tax on as PL.

My own house has 35 years left (just moved in at xmas hence low savings) and mortgage of about €230K to pay back on it, roughly €880 per month.

Rental property - 32 years left, mortgage is about €600 per month.

My salary is good but I in no way live a high life, not 6 figures anyway. and find myself with about €1000 savings per month, so i'm looking to put it somewhere rather than just leaving it in savings in my bank.

I could buy a new car but i find that a waste of money, get nothing back from it.

My partner and I are same age, no children yet and not married. But hope to do both maybe in next 5 years.

Pensions have always put me off in my 20s upto now because of the accessibility - not being able to get the money until im 50/60.

2 options i looked up but not entirely sure if im correct on this - Personal Investment Bond - contribute into a fund say zurich etc? Or 2) go into a personal pension with zurich/new ireland again and realise tax relief,

PS. I approached 2 “wealth management” or brokers in the Dublin area to set up meetings with them next week, cancelled one as I found the guy very flaky/slimey or something with little or no info. I’m not sure what they’ll propose

Really appreciate any input here, thank you in advance.

Fiyatoe

😁🤑

Browney7

My own personal view is that you need to add at least 5 to 10 grand cash to your 5 grand to give yourself a safety net or cover a new boiler, washing machine or tenant not paying rent in the rental property. You're in good shape accumulating wealth in the rental property and paying down a mortgage.

You need to consider your investment horizon for any money you plan on putting to work outside your pension. Have you reviewed your mortgage rate on your properties - could be worth paying down a bit of the debt instead of investing if and when interest rates go up.

Fiyatoe

Thanks for that input 👍 was thinking I’m a bit light on savings perhaps, don’t they say 6 months salary or something like that tucked away for emergencies.

AMKC

How about you just sell the rental property? It would mean less stress and you could pay off your own house twice as quick then as well as save more money and have a better life too. There has never been a better time to sell. The demand is there and there are not enough houses to go around so its a sellers market.

Fiyatoe

I have considered it, but I suppose it’s nice having that income there from the rent on top of my own salary each month - am I foolish in saying if there’s another crash soon, rental prices shouldn’t move down too much? Whereas sale prices could.

I don’t think the apartment has risen much at all if any since I bought it in 2018 going by similar ones for sale in the area.

I have really good tenants in at the moment until next year so I wouldn’t dream of shifting them but I do have that dread of having really bad tenants or troublesome tenants next time when / if they leave

Padre_Pio

Maybe it's not a bad idea to put it into a private pension and claim the max tax relief.

I maxed my pension to 20% of my income (30-35 years old). At the start it was just to avoid tax, but the best time to plant a tree is 20 years ago. Now I've started a pot that's growing quite quickly and will put me in a good place to taper back in 15-20 years if I have kids and need to pay college fees etc.

I suppose for you the tax relief is the biggest bonus. With the talk of an extra tax band, would you be better off putting it into a pension now? If a lower tax band is introduced you may get less back on your relief claim next year.

Retirement seems like a long way away, but the last 15 years has flown by for me. In 15 years I'll be in my late 40s. 15 years after that i'll be counting the days towards retirement. Scary thought.

RE the second property, LL are selling as they have no rights in the case of bad tenants and can't control rent due to RPZs. If you're happy with the income and you can cover the mortgage then maybe it's worth keeping the house.