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50k to invest - looking for ideas/advice

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Comments

  • #52
    Mantis Toboggan
    Registered Users, Registered Users 2 Posts: 18,099 ✭✭✭✭Mantis Toboggan


    uli84 wrote: »
    That whole topping up pension advice, would that work also for someone under 40? Can it be accessed before the retirement? Im worried that i’ll die before i even see any of the money “invested” that way.

    Yeah that would be an issue for me too, 20% of people don't make retirement. Grand that your family will benefit but I'd probably focus more on my mortgage until at least aged 50. Last 20 years then focus more on the pension.

    Free Palestine 🇵🇸



  • #53
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    Mantis Toboggan wrote: »
    Yeah that would be an issue for me too, 20% of people don't make retirement. Grand that your family will benefit but I'd probably focus more on my mortgage until at least aged 50. Last 20 years then focus more on the pension.

    Only thing if you do that is that is you are missing out on an easy and fairly large tax saving opportunity (assuming you’re are a PAYE worker), and on the compounding affect of investing (tax free) over decades - which is very large as well.

    I get the rationale for wanting to pay up a mortgage as well, but essentially by doing that exclusively you are gifting revenue a big financial favour and passing on a long term compounded investment opportunity. Maybe something to think about ...


  • #54
    AndrewJRenko
    Registered Users, Registered Users 2 Posts: 29,434 ✭✭✭✭AndrewJRenko


    uli84 wrote: »
    That whole topping up pension advice, would that work also for someone under 40? Can it be accessed before the retirement? Im worried that i’ll die before i even see any of the money “invested” that way.

    It depends on the rules of the particular scheme and whether you are still working for that employer. In most cases, if you have left that employment, you can 'retire' and get access to the funds with no tax penalty once you hit 50.

    It is another nice State subsidy to middle and wealthier classes.

    You would need to check the rules of your own scheme to be sure.


  • #55
    uli84
    Registered Users, Registered Users 2 Posts: 1,710 ✭✭✭uli84


    ok, sorry to hijack the thread, I will have similar amount or maybe slightly more to invest - say 75K but no mortgage, credit cards etc Not interested in topping up pension as would need money in about 4-5 years. Any ideas anyone?


  • #56
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    It depends on your risk appetite ............ even with a diversified portfolio 4/5 years is just about long enough to be fairly sure that you shouldn't walk away with a loss.

    But looking at a conservation 5% growth per annum over 5 years with tax free rollup 75k would grow to maybe 94k after charges............. 19k profit, taxed at 41% would yield €11k profit and your €75k back all going well.

    Decent IMO ........ once you accept funds tracking the S&)500 dropped 10% over the last week but they are now where they are a month ago......... best not to look at short term fluctuations at all but one needs to be mindful of what will likely happen your €75k over the years :)


  • #57
    AndrewJRenko
    Registered Users, Registered Users 2 Posts: 29,434 ✭✭✭✭AndrewJRenko


    uli84 wrote: »
    ok, sorry to hijack the thread, I will have similar amount or maybe slightly more to invest - say 75K but no mortgage, credit cards etc Not interested in topping up pension as would need money in about 4-5 years. Any ideas anyone?

    Pension might still work, depending on your age and your retirement age. Would be worth checking this out, given possibility of tax relief.


  • #58
    Drumpot
    Registered Users, Registered Users 2 Posts: 19,306 ✭✭✭✭Drumpot


    AndrewJRenko wrote: »
    Pension might still work, depending on your age and your retirement age. Would be worth checking this out, given possibility of tax relief.


    If a person inherited 100k and they didn’t really need it, had a significant amount of savings (emergency fund etc) and they really wanted to grow this money , one consideration would be a pension.

    Depending on their persons annual income , to drawdown €100k in income can cost from 20% to over over 50% on the top rate. If you are self employed and on the higher rate of tax you can theoretically throw in €200k(maybe over multiple years) that might only be worth 90k in your hand after tax. So if you took it that you were going to basically subsidise your income by drawing down your inheritance , you could theoretically throw in 200k from your company as an employer contribution without paying a penny in Income tax, usc or Prsi. So what would of been €90k net income into your hand would be €200k top up of your pension, 25% (or more) of which you might get tax free.

    That doesn’t even factor in the tax free growth. For non self employed the figures are similar but no USC and PRSI relief on personal contributions and limited amount they can put in per year (max 40% of 115k over 60).


  • #59
    uli84
    Registered Users, Registered Users 2 Posts: 1,710 ✭✭✭uli84


    Thanks guys, i feel i am too young (35) for putting so much extra onto pension especially since i have long term illness and don’t see myself lasting until the retirement age. Would like to do something nice when im around 40 and that’s the reason i’m looking for something no longer than 5 years.


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