Current pension fund work approx €10k, encashment calue €8k
If I use the encashment value to prop up my salary and max out pension contributions to Tax free limit, would I not be able to invest €12k instead of transferring €10k to new employer pension fund?
Are you sure that such an encashment would be considered part of your net relevant earnings which is what your pension tax/PRSI relief limit is based on as far as I know?
I'm 38 years old so can invest 20% of my salary in my pension tax free. Say I'm earning 100k that would mean that I could invest 20k in my pension tax free.
Clubman are you saying that this 20k would be reduced by 8k if I encashed my AVC?
Take the 8k put into bank account. (say take home is 4k per month)
Use 8k to live off and 2 months gross salary (€6500) into pension, thereby putting 13k into pension instead of direct transfer €10k from previous employer pension.
Yes - but then it eats into how much you can contribute to your pension this year.
You turned €10k into €8k but will be able to convert that €8k into €13k which will in turn limit your ability to put in as much into your pension this year as you otherwise could (because of the 20% limit).
Yes, €10k are my contributions and can only afford to put 12% into pension from my monthly salary so want to max out my tax free contributions this year. New company also putting in 5% as well.