If a person will get a public sector pension (and potentially AVCs related to same in future) and they operate as a sole trader as well so could avail of a PRSA (and in addition they have a small legacy pension from a previous employment etc but that's a minor consideration)...how do they go about figuring out the best pension investment strategy......I'm finding it complicated to calculate and make decisions.
Is there a way to try figure out or estimate what the max rate of contributions across all pension options should be to take maximum advantage of tax relief at the higher rate?
There's not much point contributing so much that you get taxed at the high rate on drawdown when the main point of contributing in the first place was to get tax relief at the high rate....(as thing stand I don't have dependants, now that might change but for simplicity Id like to just do the sums as if I was a single person with no dependants etc - I am aware you could get up to 200k of a lump sum tax free and the next 300k is taxed at 20%?? so there is still potential benefit in accumulating beyond the 200k lump sum etc, its really just a steer or starting point on how to do the calculations if I was to retire at 50, 55, 60, 65 and how multiple pensions interact/detract or can supplement each other etc)
I know I have no way of knowing what the tax rates, rules and regulations will be in 40/30/20 years time but assuming things remained fairly static re: rules what's the max income you could take to be tax efficient or should you do it by total pension pot ....if it is via the total pot.....then how do you value the public sector pension to calculate what you should contribute to other pensions?
In addition I think I could pay into a pension related to the sole trader activity and start drawing from the age of
50 and still continue working so would wonder how to go about calculating the benefit of something like that and how it would interact with the other pension.
I presume for some high net worth individuals they get to point where it makes more sense to retire for tax reasons than keep on working?? Apologies, there are a lot of questions in this but its hard to know where to start.....
Is there a way to try figure out or estimate what the max rate of contributions across all pension options should be to take maximum advantage of tax relief at the higher rate?
There's not much point contributing so much that you get taxed at the high rate on drawdown when the main point of contributing in the first place was to get tax relief at the high rate....(as thing stand I don't have dependants, now that might change but for simplicity Id like to just do the sums as if I was a single person with no dependants etc - I am aware you could get up to 200k of a lump sum tax free and the next 300k is taxed at 20%?? so there is still potential benefit in accumulating beyond the 200k lump sum etc, its really just a steer or starting point on how to do the calculations if I was to retire at 50, 55, 60, 65 and how multiple pensions interact/detract or can supplement each other etc)
I know I have no way of knowing what the tax rates, rules and regulations will be in 40/30/20 years time but assuming things remained fairly static re: rules what's the max income you could take to be tax efficient or should you do it by total pension pot ....if it is via the total pot.....then how do you value the public sector pension to calculate what you should contribute to other pensions?
In addition I think I could pay into a pension related to the sole trader activity and start drawing from the age of
50 and still continue working so would wonder how to go about calculating the benefit of something like that and how it would interact with the other pension.
I presume for some high net worth individuals they get to point where it makes more sense to retire for tax reasons than keep on working?? Apologies, there are a lot of questions in this but its hard to know where to start.....