Already maxed out pension contribution, overpay pension further or invest directly in shares?

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fonduster

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I am currently maxing out my pension contribution and querying what would be a better strategy.

Invest above my max contribution in a pension or invest directly in equities?

Since investing in ETF's is complex from a taxation point of view and you would need to do your research to invest in single shares etc. Would it make more sense to invest more than my max of 20pc into my pension?

This way i will invest any net amount above 20pc into my pension and will put off taxation of this amount until i retire in circa 25-30 years. I will more than likely be paying tax at the higher rate on my pension however i would hope with the compound interest coupled with the 25pc tax free lump sum, it may make up for it. It would only be small money of maybe 2-300 pm however I am interested to see what peoples thoughts are on this.
 
Do you own your home, mortgage-free?

Do you have sufficient cash reserves to weather a six-month period of unemployment?

What size is your pension pot today?
 
fonduster said:
I am currently maxing out my pension contribution and querying what would be a better strategy.

Invest above my max contribution in a pension or invest directly in equities?

Since investing in ETF's is complex from a taxation point of view and you would need to do your research to invest in single shares etc. Would it make more sense to invest more than my max of 20pc into my pension?

This way i will invest any net amount above 20pc into my pension and will put off taxation of this amount until i retire in circa 25-30 years. I will more than likely be paying tax at the higher rate on my pension however i would hope with the compound interest coupled with the 25pc tax free lump sum, it may make up for it. It would only be small money of maybe 2-300 pm however I am interested to see what peoples thoughts are on this.
Click to expand...

I have just completed a detailed analysis of this question and my conclusions are that for some investors simply continuing to pay into a pension above the maximum allowable for tax relief is possibly the right answer but it requires a detailed consideration of all the relevant facts.

www.globalwealth.ie
 
Do you still have interest only mortgage debt of ~€1million?

I would suggest that dealing with your debts should be your priority.
 
I have a similar question, I'm nearly mortgage-free <2years (no plan on moving anytime soon), contributing the max tax-free to my pension and have some savings for a rainy day. I will soon have a decent amount of cash it invest each month and I am unsure what to do with it. Would over contributing to pension make the most sense?
 
Marc said:
I have just completed a detailed analysis of this question and my conclusions are that for some investors simply continuing to pay into a pension above the maximum allowable for tax relief is possibly the right answer but it requires a detailed consideration of all the relevant facts.

www.globalwealth.ie
Click to expand...
Can you share any details you have from this analysis?
 
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