lukesfinops
Registered User
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- 3
Hello all,
Looking for your opinion in my retirement plan below, if it makes sense, or if I'm totally wrong
A quick introduction. I'm 25, have recently moved to Ireland, and want to start my retirement plan. Currently, I can save up to 50% of my salary (~2K EUR) monthly, and as a FIRE follower, want to retire earlier (before my 50s). There's another important information, I don't know whether I'll be in Ireland when time for retirement comes (probably not).
I've been looking for the most tax efficient investments, and after some time reading, I've come up with two options: Pension Funds, and Non-EU ETFs.
Why not Irish/UCITS ETFs? Well, my goal is to accumulate, I will not withdrawn any dividends, and the plan is to save for 20-25 years. With that in mind, paying 41% every 8 years due to deemed disposal is not a good idea, and will impact the magic of compound interests (might be wrong here, what do you think?).
So, let's compare Pension Funds, and Non-EU ETFs (AFAIK).
Pension Funds
Advantages
Advantages
Thanks!
Looking for your opinion in my retirement plan below, if it makes sense, or if I'm totally wrong
A quick introduction. I'm 25, have recently moved to Ireland, and want to start my retirement plan. Currently, I can save up to 50% of my salary (~2K EUR) monthly, and as a FIRE follower, want to retire earlier (before my 50s). There's another important information, I don't know whether I'll be in Ireland when time for retirement comes (probably not).
I've been looking for the most tax efficient investments, and after some time reading, I've come up with two options: Pension Funds, and Non-EU ETFs.
Why not Irish/UCITS ETFs? Well, my goal is to accumulate, I will not withdrawn any dividends, and the plan is to save for 20-25 years. With that in mind, paying 41% every 8 years due to deemed disposal is not a good idea, and will impact the magic of compound interests (might be wrong here, what do you think?).
So, let's compare Pension Funds, and Non-EU ETFs (AFAIK).
Pension Funds
Advantages
- No CGT/Deemed Disposal/Dividends taxes.
- Can contribute from my salary before taxes (and even get the benefit of my company pension match, which is 5% today).
- Need to follow the product rules for retirement age. 50 is the minimum, and 65 the normal (PRSA).
- After retiring, can only withdrawn 25% of my capital tax free.
- Will be taxed for further withdraws (can even be double taxed if living in a country with no bilateral tax agreements)
Advantages
- No tax on dividends if it's an accumulating ETF (note that if it's distributing ETF, dividends are charged up to 52% of taxes as it's considered regular income).
- Only 33% of CGT when selling the position.
- No withdrawn tax
- Can retire earlier, no need to wait until my 60s.
- Depending on the ETF location, may have withholding taxes (for example 15% for US).
- Haven't found a way to invest in US ETF's from European brokers.
- Need to manage my tax returns (not concerned, as will not withdrawn).
Thanks!